In horizontal analysis the current year is the base year

Asked by admin @ 05/11/2021 in Mathematics viewed by 261 People

When performing a horizontal analysis on an income statement, the percentage change in any individual item is calculated by dividing the dollar amount of the change from the base period to the current period by

A. the average of the base and the current period amounts.
B. the amount estimated for the future period.
C. the base period amount.
D. the current period amount.

Answered by admin @ 05/11/2021

Answer: C. the base period amount.

Explanation: While implementing a horizontal analysis on a given income statement, we compute a percentage change in any individual item by dividing the dollar amount of change from base to current time period with the base period amount.

i.e. % Change in Individual item = $\frac{Current\ Dollar\ - Base\ Dollar }{Base \ period \ amount}$

Therefore, the correct option in this case is (c)

Take any three non-collinear points a b c and draw triangle a,b,c. through each vertex of the triangle draw a line parallel to the opposite side using ruler and compass

Asked by wiki @ 15/11/2022 in Mathematics viewed by 1559 persons

In horizontal analysis the current year is the base year

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