The percentage analysis of increases and decreases in related items in comparative financial statements is called:
A)vertical analysis.
B)solvency analysis.
C)profitability analysis.
D)horizontal analysis.

Question

Quizplus · Accepted Answer

The percentage analysis of increases and decreases in related items in comparative financial statements is called horizontal analysis. Vertical analysis is the percentage analysis of each item on a financial statement relative to a specific base amount. Solvency analysis examines a company's ability to meet long-term obligations, and profitability analysis evaluates a company's ability to generate profits.

The Percentage Analysis of Increases and Decreases in Related Items