How can i show trends (Arrows depicting relative performance) along with KPI's in Sharepoint . The KPI's have excel spreadsheet as their Datasource.
I'd just create charts in the Excel files, give the charts a named range and publish it to SharePoint with Excel Services. Then you can use a Excel Services web part to display the chart.
Another option if you're using Office 2010 is to use sparklines. You could then do something similar like creating a pivot chart/table that shows the item and the sparkline.
You can't do any trending to my knowledge with the SharePoint KPI tools. Christophe has done a lot with jQuery and visualizations to do things similar for users who don't have the Enterprise SKU. You might want to review his blog, lots of good stuff there.