Horizontal analysis is analysis
A) of percentage changes over two or more 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 done by comparing percentage changes over two or more years for various items on a financial statement. It helps in understanding the trends and changes in financial position over time. Option B refers to vertical analysis, option C refers to ratio analysis, and option D is not an accurate description of horizontal analysis.

Horizontal Analysis Is Analysis