Account help please could use the help?

Question

Describe a situation in which you would use either horizontal or trend analysis. Why is that analysis the best fit in this case? Describe a situation in which you would use either vertical or ratio analysis. Why is that analysis the best fit in this case?

Answer 1

horizontal analysis is used for comparison with two or more companies, trying to make them fit for purpose so that benchmarking would be easier. it is done it percentages, which makes it better. Vertical analysis is used to study the trends ina business over a period of time say 3-5 year. (hope am not mixing it up).

A vertical analysis is usually used to determine the trends in busness while a ratio is a step further. it is used to analyse a business performance and to make a decison on the business. ratios have to be used together for it be useful, like combining current ration with gearing, etc