In determining whether a company's financial condition is improving or deteriorating
over time, vertical analysis of financial statement data would be more useful than horizontal analysis.

Question

In determining whether a company's financial condition is improving or deterioratingover time, vertical analysis of financial statement data would be more useful than horizontal analysis.

Maria Valdivia · Accepted Answer

Final Answer : False, Explanation :  Vertical analysis provides a snapshot of a company's financial condition at a single point in time by showing each item as a percentage of a base amount, which is useful for comparing the company's financial statements to industry standards or competitors. Horizontal analysis, on the other hand, compares financial data over multiple periods, which is more effective for identifying trends and evaluating a company's financial performance and condition over time, thus better for determining improvement or deterioration.

In determining whether a company's financial condition is improving or deteriorating
over time, vertical analysis of financial statement data would be more useful than horizontal analysis.

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