Question

A young software development company recently went public. To attract investors, the company executives want to emphasize the amount of growth seen in the year-end cash balance. Which type of analysis will most likely be used?A. vertical analysisB. liquidity analysisC. ratio analysisD: horizontal analysis

Answer 1

Answer: Horizontal analysis

       

Explanation: In simple words, horizontal analysis refers to the comparison of performance of a single organisation in two years in which one year is taken as a base year.

Under such an analysis, an analyst compares all the aspects of the company to assess whether the company has increased or decreased its performance with respect to revenues, profits and expenses etc. Generally the data is shown as comparative analysis.

Thus, from the above we can conclude that the correct option is D.