Quiz Ch 12 – T/F Horizontal Analysis: Comparing Financial Statement Line Items
Financial Accounting
Thomas, Tietz, and Harrison
12th Edition
In horizontal analysis, a financial statement line item is compared between the current and prior year.
In horizontal analysis, a financial statement line item is compared between the current and prior year.
The quick ratio’s numerator comprises cash, short-term investments, and net current receivables.
Accounting information should illustrate how a company’s implementation of a particular business strategy has affected its performance.
The business section of a company’s annual report offers crucial details about its products, marketing and advertising techniques, sales and distribution tactics, product design and development, quality assurance in manufacturing, and inventory management.
Vertical analysis is exemplified by the ratio of the dollar amount of each individual asset to the dollar amount of total assets.
The horizontal analysis employs trend percentages.
Benchmarking involves comparing a company’s performance to industry standards.
The horizontal analysis gives a comprehensive view of a business by showing changes in financial statement line items over time.
Common-size financial statements display figures only in dollar amounts.
The vertical analysis compares balance sheet line items between current and prior periods.