Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:
When financial statements of several years are analysed, it is termed as:
Options:
Horizontal Analysis
Vertical analysis
Ratio Analysis
None of 1 and 2
Correct Answer:
Horizontal Analysis
Explanation:
Horizontal analysis is a financial analysis technique used to evaluate and compare financial data over multiple periods, typically consecutive quarters or years. The primary goal of horizontal analysis is to identify trends, patterns, and changes in financial performance or key financial statement items over time.