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Which of the following statement about Horizontal Analysis is incorrect? A) Horizontal analysis is accomplished by...

Which of the following statement about Horizontal Analysis is incorrect?

A)

Horizontal analysis is accomplished by computing the change of financial statements for two periods of time

B)

An examination of financial statements from several years can indicate either a financially healthy or unhealthy trend.

C)

A comparison between actual financial data and budgeted data can indicate either adequate or inadequate company performance.

D)

The previous period data or budgeted data should be listed in the second column when conducting horizontal analysis.

E)

None of the above
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Answer #1

Answer is option D. This statement is irrelevant. We have to know the difference or deviation. It can be calculated even if first column is previous date and second column is new data.

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