Horizontal analysis refers to:
A)the trend of income from year to year of persons suspected of fraud.
B)changes of financial statement numbers and ratios across several years.
C)financial statement amounts expressed each year as a proportion of a base amount.
D)the change in a suspect's net worth from the beginning to the end of a period.

Question

Quizplus · Accepted Answer

Horizontal analysis is a type of financial analysis that involves comparing financial statement data and ratios across multiple years to identify trends and changes. It looks at the changes in financial statement amounts over time, such as increases or decreases in revenue, expenses, assets, and liabilities. Option A refers to income of persons suspected of fraud, Option C refers to trend analysis, and Option D refers to net worth analysis which is unrelated to financial statement analysis. Therefore, Option B is the correct answer.

Horizontal Analysis Refers To