It can help identify trends and patterns by examining financial data over time. Look at historical data and create charts to visualize changes in revenue, expenses, and profit margins. This analysis can reveal seasonal patterns, growth rates, and potential downturns. Trend analysis can also help in forecasting future performance, allowing businesses to make proactive decisions.
6. Variance Analysis
Variance analysis is conducted to compare the actual financial performances with the budgeted figures or fore-casts. It compares and identifies the discrepancies on why they happened.

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