The answer to this question is TRUE
Horizontal analysis is also known as TREND ANALYSIS. Following is the example of a horizontal analysis
This is for a Balance Sheet
|Current assets||$ 56,898||$ 38,082||$ 50,907|
|Long term investments||$ -||$ 900||$ 4,720|
|Plant assets, net||$ 105,669||$ 96,062||$ 56,257|
|Total assets||$ 162,567||$ 135,044||$ 111,884|
|Liabilities and equity|
|Current liabilities||$ 23,735||$ 20,122||$ 19,580|
|Common stock||$ 63,000||$ 63,000||$ 45,000|
|Other paid in capital||$ 7,875||$ 7,875||$ 5,000|
|Retained earnings||$ 67,957||$ 44,047||$ 42,304|
|Total liabilities and equity||$ 162,567||$ 135,044||$ 111,884|
|Long term investments||0%||19%||100%|
|Plant assets, net||188%||171%||100%|
|Liabilities and equity|
|Other paid in capital||158%||158%||100%|
|Total liabilities and equity||145%||121%||100%|
As can be seen this analysis is showing the PATTERNS in data across periods..
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