What does the base year analysis formula calculate?

The base year analysis formula is designed to track changes in financial metrics by establishing a reference point or base year. In this context, the formula "Comparison Year x 100% to find % Change" resonates as it facilitates the calculation of the percentage change in a particular financial metric or expense compared to the base year.

This method is fundamental for evaluating growth or decline over time, allowing businesses to make informed decisions based on trends and shifts in their expenses or revenue. By using the base year as the benchmark, stakeholders can easily see how much a particular figure, such as expenses, has increased or decreased in comparison to that base year, expressed as a percentage. This approach is critical in financial analysis, as it translates raw numbers into a more understandable format that highlights the relative scale of change, making it easier for managers and investors to interpret the data effectively.

The other options do not align with the purpose of base year analysis. They focus on different calculations that don't specifically provide the percentage comparison necessary for assessing performance over time.