If an Analyst Wishes to See How Operating Expenses of a Company

question 48

True/False

If an analyst wishes to see how operating expenses of a company have changed from one year to the next, using a horizontal analysis would be the best approach.

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Definitions:

Gross Margin Percentage

A financial metric that measures the difference between revenue and cost of goods sold as a percentage of revenue.

Year 2

Generally refers to the second year of a specific time period, such as a fiscal or calendar year.

Net Profit Margin Percentage

A financial metric that shows the percentage of net income generated from total revenues, indicating a company's profitability.

Year 2

Typically refers to the second year of operation, reporting, or analysis within a given context, such as fiscal years, project timelines, or investment periods.