Question: 1. Horizontal analysis involves comparing figures reported in the financial statements of two or more consecutive accounting periods. 2. The base period for calculating percentage

1. Horizontal analysis involves comparing figures reported in the financial statements of two or more consecutive accounting periods.

2. The base period for calculating percentage changes when conducting horizontal analysis is usually the most recent period.

3. Long-term creditors are more interested in the firm's liquidity than the firm's solvency.

4. In conducting ratio analysis, the numbers to be compared and expressed as a ratio should be meaningfully related to each other so that the resulting ratio can serve the purpose for which it is computed.

5.Vertical analysis involves comparing figures in the financial statements of a single-period.

TRUE OR FALSE

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