When performing a horizontal analysis, what does the "earlier year" refer to? Initial period Payback period Interest period Base period When performing a horizontal analysis, what does an increase of 100% signify? The amounts have changed to half of the previous year A 100% increase is not possible using horizontal analysis The amounts have doubled from the previous year The amounts have stayed the same from the previous year Why is horizontal analysis used? To determine the difference between revenues and expenses To determine cash flows from one year to the next To determine the difference between assets and liabilities To determine a percentage change from one year to the next Sara's Cake Company had sales last year of $125,000 with expenses of $75,000. This year, the company had sales of $165,000 with expenses of $95,000. Perform a trend analysis to see the change percentage on the sales that have occurred. 75% 150% 76% 132% Sara's Cake Company is looking at the amount of cash it will have to cover its rent in the coming months. Which type of ratios examine a firm's ability to cover its upcoming bills? Market measure ratios Profitability ratios Leverage ratios Liquidity ratios Sara's Cake