Question

The following is an example of: Year Increase (Decrease) 2018 2017 Amount % Cash $300,000 $800,000 ($500,000) (62.5) Accounts receivable 500,000 200,000 300,000 150.0 Inventory 800,000 700,000 100,000 14.3 Long-term assets 3,400,000 2,300,000 1,100,000 47.8 Total assets $5,000,000 $4,000,000 $1,000,000 25.0 O Vertical analysis. Both vertical and horizontal analvsis Horizontal analysis O Diagonal analysis.

Answer 1

Horizontal Analysis

Step-by-step explanation:

Year

Accounts Name 2018 2017 Increase/(Decrease) %

Cash $300,000 $800,000 (500,000) 62.5%

Accounts Receivable $500,000 $200,000 300,000 150%

Inventory $800,000 $700,000 100,000 14.3%

Long-term assets $3,400,000 $2,300,000 1,100,000 47.8%

Total assets $5,000,000 $4,000,000 1,000,000 25%

It is a horizontal analysis of a financial statement. It is also called a trend analysis. Horizontal analysis of financial statement shows the comparative analysis of subsequent years amount and ratio. Therefore, it is a horizontal analysis.