The following is a summary of information presented on the financial statements of The Cake Company on December 31, 2007.

- What would horizontal analysis report with respect to common stock?
A) Horizontal analysis would report stockholders' equity as 25.64% of total capital.
B) Horizontal analysis would report a dividend yield of $8.20.
C) Horizontal analysis would report a rate of return on stockholders' equity of $11.20.
D) Horizontal analysis would report a 25% increase in common stock.

Question

The following is a summary of information presented on the financial statements of The Cake Company on December 31, 2007.

- What would horizontal analysis report with respect to common stock?
A) Horizontal analysis would report stockholders' equity as 25.64% of total capital. 
B) Horizontal analysis would report a dividend yield of $8.20. 
C) Horizontal analysis would report a rate of return on stockholders' equity of $11.20. 
D) Horizontal analysis would report a 25% increase in common stock.

Quizplus · Accepted Answer

Horizontal analysis focuses on the changes in financial statement numbers and ratios across different periods. It would report changes in the value of common stock, such as a 25% increase, rather than specific ratios or yields related to stockholders' equity or dividends.

The Following Is a Summary of Information Presented on the Financial