The following is a summary of information presented on the financial statements of The Cake Company on December 31, 2014. What would a horizontal analysis report with respect to current assets?

Question

The following is a summary of information presented on the financial statements of The Cake Company on December 31, 2014.  What would a horizontal analysis report with respect to current assets?

Quizplus · Accepted Answer

A horizontal analysis compares financial information from the current year to previous years in order to highlight changes over time. Therefore, a horizontal analysis report with respect to current assets would show the percentage increase or decrease in current assets from the previous year. Choice B states that there is a 30% increase in current assets, which would be the appropriate information to include in a horizontal analysis report. Choices A, C, and D are unrelated to a horizontal analysis of current assets.

The Following Is a Summary of Information Presented on the Financial