Trend analysis allows comparison of figures over time. Reread the chapter text about trend analysis and examine the difference columns shown in Table 14-3.

Practice Exercise 14-2: Trend Analysis

The worksheet below shows the assets of Hospital A over two years.

Perform trend analysis for the assets of Hospital A.

Hospital A

Year 1 Year 2

Current Assets $1,600,000 $2,000,000

Property, Plant, and Equipment 6,000,000 7,500,000

Other Assets 400,000 500,000

Total Assets $8,000,000 $10,000,000

Solution to Practice Exercise 14-2

Hospital A

Year 1 Year 2 Difference

Current Assets $1,600,000 $2,000,000 $ 400,000 25%

Property, Plant, and Equipment 6,000,000 7,500,000 1,500,000 25%

Other Assets 400,000 500,000 100,000 25%

Total Assets $8,000,000 $10,000,000 $2,000,000

Note: The worksheet below shows Hospital A with both common sizing and trend analysis:

Hospital A

	Year 1		Year 2		Difference
Current Assets	$1,600,000	20%	$2,000,000	20%	$400,000	25%
Property, Plant, and Equipment	6,000,000	75%	7,500,000	75%	1,500,000	25%
Other Assets	400,000	5%	500,000	5%	100,000	25%
Total Assets	$8,000,000	100%	$10,000,000	100%	$2,000,000