Horizontal analysis is analysis
A) of percentage changes over several years.
B) in which all items are presented as a percentage of one selected item on a financial statement.
C) in which a statistic is calculated for the relationship between two items on a single financial statement or for two items on different financial statements.
D) of all ratios that increased or decreased over past accounting periods.

Question

Quizplus · Accepted Answer

Horizontal analysis is the comparison of financial statement items or ratios over multiple accounting periods. It focuses on identifying and analyzing percentage changes in financial statement items from one period to another. Choice A describes this process accurately. Choices B, C, and D describe other types of financial analysis, but not specifically horizontal analysis.

Horizontal Analysis Is Analysis