Which of the following BEST describes horizontal analysis?

Comparing financial figures year to year | ||

Comparing a company’s financial figures with other companies that are leaders | ||

Calculation key ratios to evaluate performance | ||

Showing each figure as a percentage of some other amount, such as total assets |

## Answer

Horizontal analysis compares single piece of information from year to another year.

Comparing company’s financial figures with other companies that are leaders – Bench marking

Showing each figure as a percentage of some other amount, such as total assets – vertical analysis

Calculation key ratios to evaluate performance – Ratio Analysis

**Ans: A Comparing financial figures year to
year**

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