What do the two major types of horizontal analyses evaluate?

The correct choice focuses on the evaluation of trends over time and benchmark year comparisons as the two major types of horizontal analyses. Horizontal analysis is a technique used to analyze financial statements over a period of time, allowing businesses to observe how various line items change. By comparing historical data from different periods, organizations can identify trends, determine growth patterns, and assess the impacts of specific financial activities, making it a valuable tool for strategic planning and decision-making.

This methodology not only highlights changes in specific financial metrics but also facilitates a year-over-year comparison, which can indicate overall performance improvements or declines. The insights gained from horizontal analysis support business leaders in making informed financial forecasts and setting actionable benchmarks.

Other options, while relevant to business evaluations in various contexts, do not specifically address the core focus of horizontal analyses—evaluating trends within financial statements and comparing them across different time periods. Therefore, they are less suitable in this particular scenario.