Horizontal analysis of comparative financial statements includes the
A)development of vertically analyzed statements.
B)calculation of liquidity ratios.
C)calculation of dollar amount changes and percentage changes from the previous to the current year.
D)evaluation of financial statement data that expresses each item in the current period's financial statement as a percentage of a base amount.

Question

Quizplus · Accepted Answer

Horizontal analysis involves comparing financial data over a period of time, typically by calculating both the dollar amount changes and the percentage changes from one year to the next. This helps in understanding the growth, decline, or stability in financial performance over the period analyzed.

Horizontal Analysis of Comparative Financial Statements Includes the