It is possible for horizontal analysis to indicate a decrease in revenues from one year to another and an increase in net income.

Question

Quizplus · Accepted Answer

Horizontal analysis only compares changes in individual line items over time, it does not show the overall performance of the company. Therefore, it is possible for revenues to decrease, but net income to increase due to cost-cutting or other factors.

It Is Possible for Horizontal Analysis to Indicate a Decrease