Horizontal analysis is performed when:
A)total assets are set at 100% and all other balances are a percentage of total assets.
B)the percentage change in the balance sheet and income statement numbers is computed for one period to the next.
C)there is a need to calculate and compare key ratios from period to period.
D)income statement amounts are shown as a percentage of total sales.

Question

Quizplus · Accepted Answer

Horizontal analysis involves analyzing the percentage change in balance sheet and income statement numbers from one period to the next. Option A describes vertical analysis, option C describes trend analysis, and option D describes common-size analysis.

Horizontal Analysis Is Performed When