Question

A) What type of analysis is indicated by the following?

Increase (Decrease)
Current Year Preceding Year Amount Percent
Current assets $ 430,000 $ 500,000 $ (70,000) (14%)
Fixed assets 1,740,000 1,500,000 240,000 16%
Group of answer choices:
O horizontal analysis
O liquidity analysis
O common-size analysis
O vertical analysis

Answer 1

horizontal analysis

Step-by-step explanation:

The example of the given question is shown below:-

= ($430,000 - 1,740,000) ÷ 5,00,000

= 14%

Horizontal analysis is also known as trend analysis. It is a financial statement that changes the amount in favor of items of financial statements over time of period. In the financial statement, it is used for the statement of two or more periods. It provide us that how much is increasing or decreasing from one period to another.

So by above calculation we can reflect horizontal analysis.