Define importance the amount and the percentage change

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Question: 1. Two profitable companies in the same industry have similar total stockholders' equity. However, one company has most of its equity balance in common stock, while the other company has most of its equity balance in retained earnings. Neither company has ever paid a dividend. Which one is more likely to be an older and more established company? Why?

2. Why, in performing horizontal analysis, is it important to look at both the amount and the percentage change?

Reference no: EM131522396

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