Horizontal analysis examines trends in a company
A)Over time.
B)Between income statement accounts in the same year.
C)Between balance sheet accounts in the same year.
D)Between income statement and balance sheet accounts in the same year.

Question

Quizplus · Accepted Answer

Horizontal analysis is used to review trends in a company over time by comparing financial data from two or more periods. This type of analysis helps identify changes in revenue, expenses, and other financial metrics over time, which can provide insights into the company's performance and potential areas for improvement. Choices B, C, and D describe vertical analysis, which compares financial data within the same period among different accounts or categories.

Horizontal Analysis Examines Trends in a Company