respond to the following peer discussion 19

Hello Dr. O’Neal, and Classmates

Trend analysis is used in businesses to project future outcomes. It can also be used as an early indicator of impending problems (Metcalf, 2018 ). Trend analysis is a “precise tool for anticipating events, to forecast market trends market trends, sales growth, inventory levels and interest rates “ (Metcalf, ). It is said that with trend analysis, the use of numbers make forecasting more exact. However there are challenges that an administrator should consider when preparing a trend analysis over a 5 year period. A major challenge entails identifying turning points in a business. “With hindsight, turning points are clearly visible, but it can be difficult to tell in the moment whether they are mere aberrations or the beginning of a new trend “ (Metcalf, 2018,pg.3 ).

Another challenge an administrator may encounter when preparing a trend analysis entails an increase in data demand, maintain accurate data, along with data security (trend analysis can be replicated ). This can all be comprised into this statement “ that they must achieve a level of fiscal health to be sustainable over the long- term ( City of Cody, 2013 pgs.1-3 ). There are a few advantages in trend analysis for the next 5 years (long-term ) 1) improve the quality of information, 2) identifying emerging trend in order to take proactive action, 3) provide a graphical analysis, 4) utilize the trends of specific financial indicators to get budget priorities (City of Cody,


City of Cody, 2013. 5 Year Financial Trend Report (pdf ). Retrieved from

Metcalf, Thomas, 2018. The Pros & Cons of Trend Analysis in Forecasting. Retrieved from