Question : Choose which of the following statements is correct.
Option 1: Horizontal or Dynamic Analysis is a time series analysis.
Option 2: Vertical or Static Analysis is carried out at one particular point of time, generally when the accounts are closed.
Option 3: Both 1 and 2
Option 4: None of the above
Correct Answer: Both 1 and 2
Solution : Answer = Both 1 and 2
1. Horizontal analysis: These are sometimes referred to as static analysis and active time analysis series. It is necessary to exhibit both positive and negative item counts in the statement of two periods in order to demonstrate true growth and amount of deficiencies.
2. Vertical analysis: Static analysis is another name for vertical analysis, often known as fixed analysis. In this case, the ratio analysis data are from a given time frame.
Hence, the correct option is 3.
