💼 Pre-MBA Exam Prep

Horizontal analysis of financial statements:

A Compares ratios to industry
B Compares line items across multiple periods to identify trends and growth rates
C Compares items within one period
D Only applies to the balance sheet

✓ Correct Answer: Option B

Horizontal (trend) analysis: compares financial data across periods. Calculates % change = (current - prior) / prior. Identifies trends, growth patterns, and anomalies over time.

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