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The analysis that is made to review and analyse the financial statements for a number of years is known as
  • a)
    Horizontal Analysis
  • b)
    Vertical Analysis
  • c)
    Cash Flow Analysis
  • d)
    None of these
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
The analysis that is made to review and analyse the financial statemen...
Horizontal Analysis:

Horizontal analysis is a technique used to evaluate and compare financial data over a series of reporting periods to identify trends and patterns. It involves the review and analysis of financial statements for multiple years to assess the performance and financial health of a company.

Key Points:
- Horizontal analysis focuses on changes in financial data over time, such as comparing revenue, expenses, assets, and liabilities from one year to the next.
- By analyzing financial statements horizontally, stakeholders can identify trends, assess growth rates, and make informed decisions about the company's financial performance.
- This analysis can help in identifying areas of strength or weakness, as well as potential risks and opportunities for improvement.
- Horizontal analysis is commonly used by investors, creditors, and management to evaluate the financial stability and profitability of a company.

In conclusion, horizontal analysis plays a crucial role in financial analysis by providing insight into a company's financial performance and trends over time. It helps stakeholders make informed decisions and assess the overall health of the business.
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The analysis that is made to review and analyse the financial statements for a number of years is known asa)Horizontal Analysisb)Vertical Analysisc)Cash Flow Analysisd)None of theseCorrect answer is option 'A'. Can you explain this answer?
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