Horizontal Analysis of Comparative Financial Statements Includes

question 13

Multiple Choice

Horizontal analysis of comparative financial statements includes

• A) development of common-sized statements
• B) calculation of liquidity ratios
• C) calculation of dollar amount changes and percentage changes from the previous to the current year
• D) evaluation of each component in a financial statement to a total within the statement

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Definitions:

Operating Financing

Refers to the process of planning and managing the day-to-day financial operations of a company, including sourcing and utilizing funds.

Investing Activities

Financial activities related to the acquisition or disposal of long-term assets and investments not included in cash equivalents.

Statement of Cash Flows

An accounting report detailing the impact of variations in balance sheet accounts and earnings on cash and cash equivalents, categorizing the analysis among operating, investing, and financing activities.

Nonoperating Activities

Various revenues, expenses, gains, and losses that are unrelated to a company’s main line of operations.