Question

Brady's Inflation Needle Co. reports accounts receivable of $100,000 in 2020 and $250,000 in 2021. Using horizontal analysis, what would be the percentage increase or decrease in accounts receivable

Answer 1

Using horizontal analysis, what would be the percentage increase or decrease in accounts receivable is: 15% increase.

Percentage increase or decrease

Using this formula

Percentage increase or decrease =2021 Account receivable- 2020 Account receivable/ 2020 Account receivable

Let plug in the formula

Percentage increase or decrease=$250,000 ‐ $100,000/ $100,000

$100,000

Percentage increase or decrease= .15 x 100

Percentage increase or decrease = 15%

Therefore what would be the percentage increase or decrease in accounts receivable is: 15% increase.

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