Describe the purpose of horizontal financial statement analysis and how it is applied.
What will be an ideal response?
Horizontal analysis is a tool to evaluate changes in financial statement data across time.
Comparative statement analysis and trend analysis are two types of horizontal analysis.
Comparative statements show line item amounts for two or more successive periods, and usually shows changes in both absolute dollar amounts and in percent changes. Trend analysis is used to reveal important changes occurring over successive financial periods. Trend analysis is different from horizontal analysis in that it doesn't subtract the base period amount in the numerator.
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Indicate whether the statement is true or false.
Which of the following audits is the least common, broadest in scope, and typically most complex?
A. Targeted. B. Correspondence. C. Office. D. Field. E. None of the choices are correct.
A study on ethical practices in purchasing found that smaller firms frequently make agreements with other organizations to purchase one another's products. This practice is referred to as
A. reciprocity. B. strategic alliances. C. tying arrangements. D. exclusive dealing. E. supply partnerships.
Huitron Inc. expects its sales in September to be $143,000. The company's contribution margin ratio is 65% and its fixed monthly expenses are $62,000. Required:Estimate the company's net operating income for September, assuming that the fixed monthly expenses do not change.
What will be an ideal response?