9 Trend analysis is A a form of vertical analysis B a form o

9. Trend analysis is: A. a form of vertical analysis. B. a form of horizontal analysis. C. both A and B D. neither A nor B

Solution

Correct answer is B. a form of horizontal analysis.

Horizontal analysis is the analysis of the current year figures as compared to the corresponding amount for previous years. It calculate the percentage of change from previous year to current year taking the previous year amount as base amount. Horizontal analysis is also referred to as Trend Analysis.