BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Vertical Analysis
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Horizontal Analysis
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Ratio Analysis
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Financial Benchmarking
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Detailed explanation-1: -Horizontal analysis is used in financial statement analysis to compare historical data, such as ratios, or line items, over a number of accounting periods.
Detailed explanation-2: -Vertical analysis shows a comparison of a line item within a statement to another line item within that same statement. For example, a business may compare cash to total assets in the current year.
Detailed explanation-3: -Three of the most important techniques are horizontal analysis, vertical analysis, and ratio analysis. Horizontal analysis compares data horizontally, by analyzing values of line items across two or more years.
Detailed explanation-4: -To conduct a horizontal analysis of Goldman Sachs’ 2021 performance compared to 2020, first subtract the line items for the base year of 2020 from those for the target year of 2021. Then, divide the change by the base year amount and multiply by 100 to get the percentage change.
Detailed explanation-5: -Horizontal analysis, also called trend analysis, is a technique for evaluating a series of financial statement data over a period of time.