Using horizontal analysis,if the base year is negative and the following year is positive,the percentage change is just as useful as if the base year and the following year were both positive.

Question

Quizplus · Accepted Answer

If the base year is negative and the following year is positive, the percentage change will give an inaccurate representation of the actual change in the data. This is because the negative value in the base year creates a lower starting point, which can make even small increases appear larger in percentage terms. Therefore, horizontal analysis is not very useful in such a scenario.

Using Horizontal Analysis,if the Base Year Is Negative and the Following