Question

Which analysis is considered as dynamic?

Options

• Horizontal Analysis

• Vertical Analysis

• Internal Analysis

• External Analysis

Answer 1

Horizontal Analysis

Explanation:

Horizontal analysis is called dynamic because it compares the financial data of a company over multiple years side-by-side. Instead of looking at a single point in time, it tracks the continuous movement, fluctuations, and growth trends of accounts (like profits, sales, and assets) across different periods. This multi-year comparison represents a dynamic and changing view of financial performance.