Year to year percentage changes in line items from comparative financial statements is called:
A)benchmarking.
B)horizontal analysis.
C)vertical analysis.
D)common-size financial statements.

Question

Quizplus · Accepted Answer

Year to year percentage changes in line items comparing two or more periods from comparative financial statements is called horizontal analysis. Benchmarking is the process of comparing a company's performance and metrics to industry standards or competitors. Vertical analysis involves expressing each line item on the financial statement as a percentage of a common base amount (e.g. expressing each line item on the income statement as a percentage of total revenue). Common-size financial statements are financial statements in which each line item is expressed as a percentage of a common base amount.

Year to Year Percentage Changes in Line Items from Comparative