Rather than looking only at the balances reported on the financial statements, it is helpful to look at the changes in the account balances over time.This is called
A)common analysis.
B)vertical analysis.
C)horizontal analysis.
D)benchmarking

Question

Quizplus · Accepted Answer

Horizontal analysis involves comparing the changes in account balances over time, typically between two or more periods. This allows for a better understanding of trends and fluctuations in the company's financial performance, which cannot be gleaned from looking at balance sheet or income statement figures alone. Common analysis refers to comparing financial ratios across different companies or industries, and vertical analysis involves analyzing the proportion of each line item on the financial statements relative to other line items or to the total. Benchmarking, on the other hand, involves comparing a company's performance to industry or competitor standards.

Rather Than Looking Only at the Balances Reported on the Financial