What technique is used to evaluate a series of financial statement data over time?

The technique used to evaluate a series of financial statement data over time is horizontal analysis. This method involves comparing financial information across different periods, which allows analysts to identify trends, growth patterns, and fluctuations in financial performance. By looking at line items over multiple years, one can assess how revenues, expenses, and other key metrics have changed and make informed judgments about the company's performance and sustainability.

Horizontal analysis typically focuses on percentage changes from year to year, making it easier to spot significant variations and trends in financial performance over time. This analysis is crucial for stakeholders looking to assess the long-term trajectory of a business and evaluate its financial health.

In contrast, vertical analysis focuses on a single period's financial statement, expressing each line item as a percentage of a base figure, such as total revenue or total assets. Liquidity analysis examines a company's ability to meet its short-term obligations, while ratio analysis involves evaluating the relationships between various financial metrics. While all these techniques are valuable in financial analysis, horizontal analysis specifically targets the evaluation of data across time periods, making it the correct choice for the question posed.