Trend Analysis: the process of evaluating the performance of firm by comparing it with the historical data of firm. Example: It is also called as horizontal analysis. Suppose Long term in year 2016 is $2000 and in 2017, it is 3000.Trend Analysis will be percentage change in it i.e. ($3000 - $2000)/$2000*100 = 50% increase i.e. it is analyzed that company has borrowed the additional debt of $1000 in one year.

Industry Average Analysis: the process of evaluating the performance of the firm by comparing it with the other firms of same industry. In industry analysis, an example is assessing the performance of firm against industry average. Suppose, Debt ratio as per industry average is 1.5 and debt equity ratio of firm is 1.25. Analysis of such ratio establish the fact that firm is in good position as compared to industry performers.

Peer Group Analysis: the process of evaluating the performance of the firm by comparing it with the competitors of firm who are in its line of operations or Industry. In peer group analysis, its main competitors are considered who are in same line of operation. Suppose the quick ratio of peer group is 0.90 and quick ratio of firm is 0.97. Further interpreting the ratios, it can be said that firm is doing well than its competitors since firm has higher quick ratios.

Is there one that stand out as being more important than the others OR do they need to be used together? Explain.