Asked by Melisa Di?isa?lam on Jul 08, 2024
Verified
Horizontal analysis of comparative financial statements includes
A) development of common-sized statements
B) calculation of liquidity ratios
C) calculation of dollar amount changes and percentage changes from the previous to the current year
D) evaluation of each component in a financial statement to a total within the statement
Horizontal Analysis
A method of financial analysis in which financial statements figures for a period are compared to those of the previous period to determine the changes in dollar amounts and percentages.
Liquidity Ratios
Financial metrics used to measure a company's ability to pay off its short-term liabilities with its short-term assets.
Dollar Amount Changes
Alterations in financial figures, reflecting increases or decreases in values such as revenues, expenses, assets, or liabilities over a period.
- Understand the fundamentals and methods of computation for horizontal analysis.
- Identify and analyze trends in financial data over time.
Verified Answer
Learning Objectives
- Understand the fundamentals and methods of computation for horizontal analysis.
- Identify and analyze trends in financial data over time.
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