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Horizontal and Vertical Analyses Are Analytical Tools Frequently Used to Analyze

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Essay

Horizontal and vertical analyses are analytical tools frequently used to analyze financial statements. What type of information or insights can be obtained by using these two techniques? Explain how the output of horizontal analysis and vertical analysis can be compared to industry averages and/or competitive companies.


Definitions:

Living Standards

Indicate the wealth, comfort, material goods, and necessities available to an individual or society.

Per Capita Energy Use

The average amount of energy consumed per person within a given geographic area.

Modernizing Economies

Refers to economies undergoing a transition from traditional agricultural methods to more industrial and technological methods of production.

Declining Birthrates

A situation where the number of births per year decreases over a period of time, affecting population growth.

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