In a Horizontal Analysis, If There Is a Negative Amount

question 11

True/False

In a horizontal analysis, if there is a negative amount in the base year and a positive amount in the next year, then no percentage change can be calculated.

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Definitions:

Capital Expenditure

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Revenue Expenditure

Expenses incurred by an organization in its day-to-day operations which do not add to the value of an asset.

Operating Costs

Expenses associated with the day-to-day functions of a business, excluding costs associated with production or acquisition of goods.

Depreciable Cost

Depreciable cost is the cost of a fixed asset that is subject to depreciation over its useful life, excluding salvage value.