Horizontal analysis (Trend analysis) is a method that is based on trend analysis. It monitors the development of items of financial statements in time. The evaluation is done by quantifying absolute and relative changes of statement items “line by line”. For this analysis, it is necessary to have a longer interval data and to exclude any accidental and emergency effects (e.g. impact of natural disasters).
Horizontal analysis method belongs to the Extensive (absolute) indicators analysis.
Use of the horizontal analysis in practice: In the enterprise it is used by CFO (Chief Financial Officer) in the processing of financial analysis.
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