Mason owns stock in Munnymacher Inc. and wants to see if he can identify any trends in its financial performance over the past few years. What would he therefore want to perform?
A) vertical analysis
B) horizontal analysis
C) incremental analysis
D) elasticity analysis

Question

Quizplus · Accepted Answer

Mason would want to perform a horizontal analysis, which involves comparing financial data from previous years to identify any trends or changes in performance over time. Vertical analysis involves comparing different items on a financial statement to each other, incremental analysis is used to make decisions about whether or not to undertake a specific project, and elasticity analysis is used to determine how sensitive a product or service is to changes in price. None of these would be as useful to Mason in analyzing Munnymacher Inc.'s financial performance over time.

Mason Owns Stock in Munnymacher Inc