Horizontal Line

DEFINITION of 'Horizontal Line'

In finance and economics, a horizontal line is usually the X axis in a data plot. It is a line that appears to proceed from left to right, or parallel to the x-axis in coordinate geometry.

BREAKING DOWN 'Horizontal Line'

In geometric analysis, a horizontal line appears to proceed along the x-axis.  Put another way, on a perfectly horizontal line, all values on the line will have the same y-value.

Horizontal analysis is used to compare values or prices over time.  This is simply an aspect of fundamental analysis in which an analyst will compare various earnings reports and statements over time.  In this kind of analysis, time functions as the horizontal x-axis, and it allows analysts to calculate percentage changes over time, a useful tool for representing the degree of change.

When looking at supply and demand curves, a perfectly horizontal line indicates that an item has perfect elasticity, or that its demand is immediately responsive to changes in price.