Laura and Abby are evaluating three telecommunication companies to determine the best company to invest in. Horizontal analysis will enable them to make comparisons of financial statements of the three companies over the past several years and help determine the increase in their profits.

Question

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This statement is true. Horizontal analysis involves comparing financial statements of a company over multiple time periods to identify trends and changes in certain financial items, such as profits. This can help in evaluating the financial performance of different companies and making investment decisions.

Laura and Abby Are Evaluating Three Telecommunication Companies to Determine