Which of the following is an accurate description of horizontal analysis?
A)Study of changes in individual financial statement amounts as a percentage of a related base amount
B)Study of percentage changes in various financial statement amounts from year to year
C)Study of changes in key financial ratios from year to year
D)None of the above

Question

Quizplus · Accepted Answer

Horizontal analysis is the study of percentage changes in various financial statement amounts from year to year. A is incorrect because it describes vertical analysis, C is incorrect because it describes trend analysis, and D is incorrect because horizontal analysis is a legitimate accounting concept.

Which of the Following Is an Accurate Description of Horizontal