Horizontal analysis of comparative financial statements includes the
A) development of common size statements.
B) calculation of liquidity ratios.
C) calculation of dollar amount changes and percentage changes from the previous to the current year.
D) evaluation of financial statement data.

Question

Quizplus · Accepted Answer

Horizontal analysis involves comparing financial statement data over a certain period of time, often from one year to the next. This comparison includes calculating the dollar amount changes and percentage changes from the previous year to the current year. Common size statements and liquidity ratios are not specifically part of horizontal analysis, although they may be used in conjunction with this type of analysis. The evaluation of financial statement data is a more general concept that encompasses various types of analysis, including horizontal analysis.

Horizontal Analysis of Comparative Financial Statements Includes the