Practicing Success
Practicing Success
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| Which analysis is based only on one year's data? |
Horizontal Analysis Vertical analysis Cash Flow Statement None of 1 and 2 |
| Vertical analysis |
| Static analysis of financial statement covers a period of one year and the analysis is made on the basis of only one set of financial statements. Static analysis is also called vertical analysis. Static analysis of financial statement fails to incorporate the periodic changes, so it may not be very conductive to a proper understanding of the financial position of the firm. When an analysis covers a period of several years, it is termed as dynamic analysis of financial statements. Dynamic analysis is also called as horizontal analysis. |
