The percentage analysis of increases and decreases in corresponding items in comparative financial statements is referred to as horizontal analysis.

Question

Quizplus · Accepted Answer

The statement is true. Horizontal analysis is a technique used in financial statement analysis in which an analyst compares line items in comparative financial statements over a period of time to identify changes and trends in the financial performance of a company. The changes in each line item are expressed as a percentage to determine the percentage change from period to period.

The Percentage Analysis of Increases and Decreases in Corresponding Items