All of the following statements regarding a horizontal analysis are true except:

 a. If Fees Earned in Year 1 is $125,000 and Fees Earned in Year 2 is $143,750, a horizontal analysis will indicate a 15% increase over this period. 

b. A horizontal analysis is used to compare an item in a current statement with the same item in prior statements. 

c. When two statements are compared in horizontal analysis, the earlier statement is used as the base for computing the amount and the percent of change.

d. A horizontal analysis can be performed on a balance sheet and income statement, but not on a statement of cash flows