Horizontal analysis of financial statements may be accomplished through:
A) placing statement items on an after-tax basis.
B) computing net income as a percentage of sales.
C) computing both earnings per share and the price-earnings ratio.
D) trend percentages.

Question

Quizplus · Accepted Answer

Trend percentages are used in horizontal analysis to calculate the percentage change in a statement item over time. This allows for a comparison of financial data from different periods and helps identify trends and patterns in the company's performance. Choices A, B, and C are not appropriate methods for conducting horizontal analysis.

Horizontal Analysis of Financial Statements May Be Accomplished Through