HORIZONTAL FINANCIAL ANALYSIS Definition

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HORIZONTAL FINANCIAL ANALYSIS allows comparison of one companys ratios to the ratios of other companies as well as to average industrial ratios and internal industrial deviation of these ratios.

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H as the fifth letter of a Nasdaq stock symbol indicates that the issue is the second preferred bond of the company.

NATURAL CLASSIFICATION of costs focuses on the nature of the cost item. In this classification structure, the total operating costs of an activity can be classified into manufacturing costs and commercial costs. Manufacturing costs include all direct materials and direct labor, as well as, factory overhead. Such factory overhead costs include indirect materials (such as factory supplies & lubricants), indirect labor (such as supervision and inspection) and other indirect costs (such as rent, insurance, and utilities). Commercial expenses include marketing expenses (such as advertising, printing, and sales salaries) and administrative (general and administrative (G&A)) expenses (such as administrative office salaries, rent, and legal expenses).

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