Horizontal Analysis Refers to

question 47

Multiple Choice

Horizontal analysis refers to

• A) The trend of income from year to year of persons suspected of fraud.
• B) Changes of financial statement numbers and ratios across several years.
• C) Financial statement amounts expressed each year as a proportion of a base amount.
• D) The change in a suspect's net worth from the beginning to the end of a period.

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Definitions:

Debt-Equity Ratio

This ratio quantifies the balance of equity and debt financing a company uses for its assets.

Capital Spending

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

Retained Earnings

The part of net profits not distributed as dividends, instead kept by the company for reinvestment in its main business or for debt repayment.

Earnings Per Share

A company's profit divided by the number of outstanding shares of its common stock, indicating the company's profitability.