Horizontal analysis compares a financial statement line item in the current year with the same line item in the prior year.

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Horizontal analysis is a technique used to compare financial statement line items over time, often from one year to the next. By comparing these line items, it is possible to identify changes in the company's financial performance and identify trends that are emerging. This is an important tool for business managers and investors alike, as it provides insight into the company's financial health and can help guide decision-making processes.

Horizontal Analysis Compares a Financial Statement Line Item in the Current