The analysis of percentage changes in comparative statements is known as:
A) economic value added analysis.
B) vertical analysis.
C) horizontal analysis.
D) benchmarking analysis.

Question

Quizplus · Accepted Answer

Horizontal analysis is the analysis of percentage changes in comparative statements over a period of time. Option A, economic value added analysis, is a tool that measures a company's financial performance based on the residual wealth calculated, i.e., the residual income the company or project generates after accounting for the cost of invested capital. Option B, vertical analysis, involves presenting the financial statements in percentage terms to compare each line item's relative size in a statement. Option D, benchmarking analysis, involves comparing a company's performance against industry benchmarks or competitors to identify areas for improvement.

The Analysis of Percentage Changes in Comparative Statements Is Known