Questions: (Current period amount - Base period amount) = Percentage change * Base period amount

Solution Steps

To determine which equation accurately describes Horizontal analysis in terms of percent change, we need to understand that Horizontal analysis involves comparing financial data over a series of periods. The percent change is calculated as the difference between the current period amount and the base period amount, divided by the base period amount, and then multiplied by 100 to get a percentage.

Let:

• \( \text{Current period amount} = 120 \)
• \( \text{Base period amount} = 100 \)

The difference between the current period amount and the base period amount is calculated as: \[ \text{Difference} = \text{Current period amount} - \text{Base period amount} = 120 - 100 = 20 \]

The percentage change is calculated using the formula: \[ \text{Percentage change} = \frac{\text{Difference}}{\text{Base period amount}} \times 100 \] Substituting the values: \[ \text{Percentage change} = \frac{20}{100} \times 100 = 20.0 \]

Final Answer