Horizontal Analysis of Financial Statements Includes the

question 40

Multiple Choice

Horizontal analysis of financial statements includes the

• A)calculation of liquidity ratios.
• B)calculation of profitability ratios.
• C)calculation of percentage changes from the previous year.
• D)evaluation of data relative to a base year.

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Definitions:

Fixed Costs

Costs that do not change with the number of sales made.

Variable Cost

Expenses that change in proportion to the activity or volume of business, such as materials and labor.

Right Price

The optimal price point for a product or service, taking into account factors such as value to the customer, demand, and competition.

Consumer Demand

The desire and willingness of consumers to purchase goods and services at various price points.