Question

horizontal analysis:
multiple choice
○ is a method used to evaluate changes in financial data across time.
○ is also called vertical analysis.
○ is the presentation of financial ratios.
○ is a tool used to evaluate financial statement items relative to industry statistics.
○ evaluates financial data across industries.

Explanation:

To solve this, we analyze each option:

• Option 1: Horizontal analysis (also called trend analysis) evaluates financial data changes over time (e.g., comparing year - over - year figures).
• Option 2: Vertical analysis is different (expresses items as % of a base amount, like total assets), so horizontal ≠ vertical.
• Option 3: Horizontal analysis focuses on time - series changes, not just presenting ratios.
• Option 4: Evaluating relative to industry stats is more about benchmarking/industry analysis, not horizontal analysis.
• Option 5: Horizontal analysis is about a company's own data over time, not across industries.

So the correct description is in Option 1.

Answer:

A. Is a method used to evaluate changes in financial data across time.