Rate of change is a tool that is used to calculate the percentage of change in variables over the duration of a specific time period. It is used to express transitions over a period of time to help follow the flow of an asset. The tool assists in evaluating an organizations financial health during the month to month or year over year time frames. Financial statement analysis techniques help users identify relationships between and among financial statements, reveal trends over time, and make comparisons between companies(Wahlen et al., 2017). The analysis is utilized to assist in making decisions with regard to the companys ability to receive leading, making investments, and timing for when a company is able to make transactions financially. In computing a companys compound annual rate of growth over a 3-year period, divide the most recent year total by the base year total. Take the square root of the dividend. From the sum of that number, subtract 1 and then multiply by 100 to convert it to the compound percentage rate of growth over that period.

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