Horizontal Analysis

question 63

Multiple Choice

Horizontal analysis:

• A) Is a method used to evaluate changes in financial data across time.
• B) Is also called vertical analysis.
• C) Is the presentation of financial ratios.
• D) Is a tool used to evaluate financial statement items relative to industry statistics.
• E) Evaluates financial data across industries.

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Definitions:

Equity Method

A financial recording method where investments are logged if the investor has a considerable impact on the investee, though not complete control.

Cumulative Losses

Total losses accumulated over a period, often reflecting a company's financial difficulties or losses in investment value.

Fair-Value Method

An accounting strategy used to measure and report the value of certain assets and liabilities on the basis of their actual or estimated fair market prices.

Fair Value

The income derived from the disposal of an asset or the payment required for the assignment of a liability in an organized exchange with market participants during the evaluation period.