The Horizontal Method of Analyzing Financial Statements


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question 1 of 3

When an accountant compares revenues or liabilities over two different quarters, the accountant is doing a:

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1. A horizontal analysis can be done with _____ or _____.

2. If you're looking at the number of dollars left at the end of a quarter, and you're comparing that to other quarters, you're doing what type of horizontal analysis?

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About This Quiz & Worksheet

This quiz focuses on the practical application of horizontal analysis. You will be tested on the different ways a company might use this method to make important financial decisions.

Quiz & Worksheet Goals

To pass this quiz you will need to be familiar with:

  • Different methods of conducting a horizontal analysis
  • The term for the comparison of two different quarters looking at dollars
  • Financial statements used in a horizontal analysis

Skills Practiced

  • Critical thinking - apply relevant concepts to examine information about the comparison of revenue and liabilities in a different light
  • Information recall - access the knowledge you've gained regarding the types of financial statements that may be used when performing a horizontal analysis
  • Knowledge application- use your knowledge to answer questions about the different types of horizontal analysis

Additional Learning

To learn more about the horizontal method, check out the related lesson called The Horizontal Method of Analyzing Financial Statements. This lesson discusses:

  • How a horizontal analysis can help business owners make informed decisions
  • Conditions that might account for a financial increase from one period to another
  • Important information found on financial statements