In conducting horizontal analysis,it is important to focus attention on the changes in
A)the composition of the statements.
B)dollar amounts and their percentages.
C)dollar amounts.
D)percentages.

Question

Quizplus · Accepted Answer

Horizontal analysis involves comparing financial data from different periods to identify changes and trends over time. The dollar amounts and their percentages are the key focus of this analysis. By comparing dollar amounts and their percentage changes, we can identify trends and changes in the financial performance of a company. However, it is important to note that changes in composition can also provide insights into a company's financial health, especially if there are significant changes in the types of assets or liabilities held by the company.

In Conducting Horizontal Analysis,it Is Important to Focus Attention on the Changes