Question

Let Homew.. Get Homew... Get Homew Liquidity An Get Home 12,13 Saved Trend analysis is a form of horizontal analysis that can reveal patterns in data across successive periods. True or False True False

Answer 1

The answer to this question is TRUE

Horizontal analysis is also known as TREND ANALYSIS. Following is the example of a horizontal analysis

This is for a Balance Sheet

	2019	2018	2017
Assets
Current assets	$   56,898	$   38,082	$   50,907
Long term investments	$            -	$         900	$      4,720
Plant assets, net	$ 105,669	$   96,062	$   56,257
Total assets	$ 162,567	$ 135,044	$ 111,884
Liabilities and equity
Current liabilities	$   23,735	$   20,122	$   19,580
Common stock	$   63,000	$   63,000	$   45,000
Other paid in capital	$      7,875	$      7,875	$      5,000
Retained earnings	$   67,957	$   44,047	$   42,304
Total liabilities and equity	$ 162,567	$ 135,044	$ 111,884
	2019	2018	2017
Assets
Current assets	112%	75%	100%
Long term investments	0%	19%	100%
Plant assets, net	188%	171%	100%
Total assets	145%	121%	100%
Liabilities and equity
Current liabilities	121%	103%	100%
Common stock	140%	140%	100%
Other paid in capital	158%	158%	100%
Retained earnings	161%	104%	100%
Total liabilities and equity	145%	121%	100%

As can be seen this analysis is showing the PATTERNS in data across periods.