Foundation of Accounting from peregrine global Questions and Verified Answers| 100% Correct| Grade A+

Financial statements - provide information that is useful for making investment and other economic decisions about businesses horizontal analysis - the amount of each line item on the most recent statement is compared with the related item on earlier statements, and expressed as a percentage change. When horizontal analysis is used to compare data from two or more dates or periods, amounts from the earliest statement are used as the base for computing percentage increases and decreases. While computing the percentage change in various financial statement line items is straightforward, interpreting the significance of the increases and decreases usually benefits from additional information. vertical analysis - the balance sheet is analyzed by stating each asset item as a percent of total assets. Each liability and stockholders' equity item is stated as a percent of total liabilities and stockholders' equity. Although vertical analysis is a technique that is applied to an individual statement, comparative vertical analyses are useful. The times interest earned ratio is computed as blank___________ . - income before tax plus interest expense divided by interest expense