Horizontal analysis:
A)is used to identify trends over time.
B)identifies the relative contribution made by each financial statement line item.
C)provides an understanding of the relationships among various items on financial statements.
D)involves comparing amounts across different financial statements.

Question

Quizplus · Accepted Answer

Horizontal (trend)analyses are conducted to help financial statement users recognize important financial changes that unfold over time.Horizontal analyses compare individual financial statement line items horizontally (from one period to the next),with the general goal of identifying significant sustained changes (trends).These changes are typically described in terms of dollar amounts and year-over-year percentages.

Horizontal Analysis