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:

ROE

Return on Equity is a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how well a company utilizes investments to generate earnings growth.

Current Ratio

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, by comparing a company's current assets to its current liabilities.

Inventories

Assets consisting of goods available for sale to customers in the ordinary course of business.

Common Stock

A form of corporate equity ownership, a type of security representing ownership interests in a corporation.