what type of analysis is indicated by the following? increase (decrease) current year preceding year amount percent current assets $ 430,000 $ 500,000 $(70,000) (14)% fixed assets 1,740,000 1,500,000 240,000 16
Horizontal analysis is the type of analysis is shown.
What is the horizontal analysis?
A financial analysis method known as horizontal analysis is employed to assess a company's performance throughout time. A corporation is better able to identify the direction of change in account balances and the size of that shift by contrasting prior-period financial data with more recent financial figures.
Formula for Horizontal Analysis: To calculate this, first subtract the value of the base period from the value of the comparison period, then divide the result by the value of the base period, and then multiply the result by 100.
Vertical analysis shows quantities as percentages of a base figure, whereas horizontal analysis shows variations across years or periods. While vertical analysis often concentrates on one reporting period, horizontal analysis frequently evaluates many reporting periods.
