Horizontal analysis of comparative financial statements includes a. calculation of liquidity ratios. b. development of common-si
ze statements. c. evaluation of each component in a financial statement to a total within the statement. d. calculation of dollar amount changes and percentage changes from the previous to the current year.
Horizontal analysis is the analysis of the comparison of the historical financial information over a series of reporting periods. It is mostly used to know if any numbers are usually high or low in comparison to the information of bracketing periods, if the numbers are unusually high or low it can lead to detailed investigation to find out the reason. It is also used to project the number of various line items for the future. The analysis includes a simple grouping of information which is sorted by period. The numbers of succeeding periods can also be expressed in percentages.
The twelve Federal Reserve banks are involved in monetary policy in several ways including the following except voting on the purchase and sale of government securities that affect both interest rates and the amount of reserves in the banking system.