In Horizontal Analysis, If an Item Has a Negative Amount

question 34

True/False

In horizontal analysis, if an item has a negative amount in the base year, and a positive amount in the following year, the percentage change will exceed 100%.

---

Definitions:

Balance Sheet

A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of the firm's financial condition.

Sales On Account

Sales made to customers for which payment is to be made in the future.

Cost Of Goods Sold

The direct expenses related to the manufacturing of products sold by a company, encompassing both materials and labor costs.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue from credit sales by comparing net credit sales with the average accounts receivable.