Question

Financial statement analysis for different periods is known a

• A. Vertical analysis
• B. Comparative analysis
• C. Horizontal analysis
• D. Budget analysis

Answer 1

Answer:

B. Comparative analysis

Comparative analysis is the process of comparing financial statements over different periods to identify trends, growth, or changes in financial performance. Horizontal analysis is often used as a method within comparative analysis, but the broader term for analyzing multiple periods is comparative analysis. Vertical analysis looks at a single period, expressing each item as a percentage of a base (like total assets or sales). Budget analysis compares actual results to planned budgets, not across periods.