The technique for analyzing the percentage change in individual financial statement items from one accounting period to the next is known as:
A) Ratio analysis
B) Vertical analysis
C) Horizontal analysis
D) Correlation analysis

Question

Quizplus · Accepted Answer

Horizontal analysis is the technique of analyzing the percentage change in individual financial statement items from one accounting period to the next. Ratio analysis involves comparing different financial ratios to evaluate a company's financial health, while vertical analysis involves calculating the percentage of each line item on a financial statement relative to a base amount. Correlation analysis involves examining the relationship between two variables.

The Technique for Analyzing the Percentage Change in Individual Financial