A technique for evaluating items on a single financial statement is called ________ analysis.
A)horizontal
B)vertical
C)financial statement
D)time-series

Question

Quizplus · Accepted Answer

Vertical analysis involves evaluating the items on a financial statement as a percentage of a base value, typically total assets for a balance sheet or net sales for an income statement. This allows for easy comparison between different periods or companies. Horizontal analysis compares items on a financial statement over multiple periods to see changes in performance, while financial statement analysis encompasses both vertical and horizontal analysis as well as other techniques. Time-series analysis also involves comparing periods, but focuses on identifying trends and patterns in the data.

A Technique for Evaluating Items on a Single Financial Statement