Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:

What is the name of the analysis that is made to review and analyse the financial statements for a number of years?

Options:

Cash Flow Analysis

Vertical Analysis

Horizontal Analysis

None of these

Correct Answer:

Horizontal Analysis

Explanation:

The correct answer is option 3- Horizontal Analysis.

In Horizontal Analysis, the company’s financial statements are made to review for several years, and it is also called a long-term analysis. It is useful for long-term planning and compares figures of two or more years.