Cost of the asset$100,000
Life of the asset 5 years
Depreciation rate20%
Capital cost allowance rate 50%
Residual value of the asset nil
Income tax rate 50%
-Both, horizontal analysis and vertical analysis are financial management tools that can be used to analyze the statement of financial position and the statement of income.

Question

Cost of the asset$100,000 
Life of the asset 5 years 
Depreciation rate20% 
Capital cost allowance rate 50% 
Residual value of the asset nil 
Income tax rate 50%
-Both, horizontal analysis and vertical analysis are financial management tools that can be used to analyze the statement of financial position and the statement of income.

Quizplus · Accepted Answer

Horizontal analysis compares financial data over a period of time to identify trends and growth patterns, while vertical analysis breaks down each item in the financial statement as a percentage of a base figure to understand the relative significance of various components, making both applicable to analyzing balance sheets and income statements.

Cost of the Asset$100,000