Horizontal analysis involves expressing each item in the financial statements as a percentage of an appropriate total, or base amount, within the same year.

Question

Quizplus · Accepted Answer

Horizontal analysis involves comparing financial data across multiple periods, focusing on the changes in absolute or percentage terms from one period to the next, rather than expressing items as a percentage of a total within the same year, which describes vertical analysis.

Horizontal Analysis Involves Expressing Each Item in the Financial Statements