Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger

Exercise 1

Foreman Company provided income statements for the past five years. In looking at the percentage columns for each year, you notice that sales are 46 percent higher in Year 5 than in Year 1. Foreman has most likely provided
A) a horizontal analysis using year 1 as the base year.
B) a vertical analysis using sales as the base.
C) a horizontal analysis using the prior period as the base year.
D) a vertical analysis using net income as the base.
E) none of the above.