The Ranger Corporation data for the current year and prior year is as follows: What would a horizontal analysis report with respect to current liabilities show?
A)Current liabilities are 33.24% of total capital.
B)Current liabilities saw a 27.54% increase from the prior year to the current year.
C)The current ratio is 4.65.
D)Current liabilities saw a 38.00% increase from the prior year to the current year.

Question

The Ranger Corporation data for the current year and prior year is as follows:  What would a horizontal analysis report with respect to current liabilities show?
A)Current liabilities are 33.24% of total capital. 
B)Current liabilities saw a 27.54% increase from the prior year to the current year. 
C)The current ratio is 4.65. 
D)Current liabilities saw a 38.00% increase from the prior year to the current year.

Quizplus · Accepted Answer

A horizontal analysis compares financial data from one period to another period and expresses changes as a percentage. Therefore, a horizontal analysis report with respect to current liabilities would show the percentage increase or decrease in current liabilities from the prior year to the current year. Choice A is not related to current liabilities. Choice B is the correct answer for the change in current liabilities, but it is not the only option. Choice C is related to the current ratio, not specifically to current liabilities. Choice D shows the percentage increase in current liabilities from the prior year to the current year.

The Ranger Corporation Data for the Current Year and Prior