Static and Dynamic Analysis-3

A static analysis of these percentages at any given point in time can be useful.  But a dynamic analysis, comparing the evolution of these percentages from period to period can be even more useful in seeing overall trends, and thereby knowing how resources are being allocated, what type of debt is being incurred, and how owner’s equity is being affected by operations.

This type of dynamic analysis can be performed by choosing a certain period or year as a baseline (N), and then comparing the percentages for period N with the percentages for the following period (N+1), or with the percentages from as many other periods (N+2, N+3, N-1, N-2, etc.) as you wish, in order to see the trends over the periods in which you are interested.

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Quantitative Easing!!!

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