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Horizontal analysis highlights the magnitude and significance of the dollar changes. true or false .

Horizontal analysis highlights the magnitude and significance of the dollar changes. true or false .

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Answer #1

Solution: True

Explanation: To analyze the financial statements the companies have to perform either a horizontal analysis or vertical analysis. Although both analysis approaches are similar in that the dollar amounts reported are converted to percentages however these differ in the base used for the computation of the percentages. Horizontal analysis makes a comparison of the account balances and ratios over different time frames to determine the significance and magnitude of changes

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