The percentage change in long-term liabilities between two balance sheet dates is an example of:
A)vertical analysis.
B)solvency analysis.
C)profitability analysis.
D)horizontal analysis.

Question

Quizplus · Accepted Answer

This is an example of horizontal analysis, which involves comparing financial information from different periods to identify trends and changes over time. In this case, we are specifically looking at the percentage change in a specific balance sheet item between two dates. Solvency analysis pertains to a company's ability to meet its long-term obligations, while profitability analysis focuses on a company's earnings and profitability. Vertical analysis involves expressing financial data in terms of percentages relative to a base amount.

The Percentage Change in Long-Term Liabilities Between Two Balance Sheet