Horizontal Analysis Examines Trends in a Company

question 37

Multiple Choice

Horizontal analysis examines trends in a company

• A)Over time.
• B)Between income statement accounts in the same year.
• C)Between balance sheet accounts in the same year.
• D)Between income statement and balance sheet accounts in the same year.

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Definitions:

Retained Earnings

The portion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.

Income Statement

A financial statement that shows a company’s revenues, expenses, and profits or losses over a specific period of time.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing ownership interest.

Cash Flows

The total amount of money being transferred into and out of a business, particularly affecting its liquidity.