Horizontal Analysis: Definition, Importance, and Application | Test Prep

Horizontal Analysis

Prev Question Next Question

Question

"Horizontal analysis" refers to:

Answers

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D.

C

In comparative financial analysis, one of the important parts is detecting trends in the changes that occur over time in the different financial statements. This trend analysis is quirkily referred to as "horizontal analysis," probably because comparison implies a side-by-side analysis of the financial items in the statements. Two popular techniques in horizontal analysis are "year-to-year change" analysis and "Index number trend series" analysis.