Horizontal analysis:
A)is exactly the same as "vertical analysis".
B)refers to the development of percentages indicating the proportionate change in the same item over time.
C)is useful for balance sheet but not for income statement.
D)involves the expression of each item on a particular period's financial statements as a percent of one specific item which is referred to as a base.
E)None of these choices are correct.

Question

Quizplus · Accepted Answer

Horizontal analysis refers to the comparison of financial data over a period of time, aiming to identify trends and growth patterns by calculating the percentage change for each line item from one period to the next. This is different from vertical analysis, which compares items within a single financial statement.

Horizontal Analysis