A Comparative Income Statement With Horizontal Analysis

Horizontal analysis example basic let us assume that we are provided with the income statement data of company abc.

A comparative income statement with horizontal analysis. We need to horizontal analysis on this company. If required round to one decimal place. Prepare a comparative income statement with horizontal analysis for the two year period using 2011 as the base year. If you made 45 000 in 2015 and 50 000 in 2016.

A horizontal or time series analysis looks at trends over time. In a horizontal analysis the the changes in income statement and balance sheet items are computed in dollars and percentage and compared with the expected changes. Prepare a horizontal analysis of the comparative income statement of harlan designs inc. Round to one decimal place.

You can see growth patterns and seasonality. Trend analysis for income statement items using excel. Comparative income statement is the income statement in which multiple periods of the income statement are dealt and compared side by side so as to allow the reader to compare the incomes from a previous year and make investment decisions on whether or not to invest in the company. Round percentage changes to one decimal place.

But if sales revenue increases by only 5 then it needs to be investigated. Consider the following example of comparative income statement analysis. When calculating growth look at the percentage of change between accounting periods. Horizontal analysis formula amount in comparison year amount in the base year amount in a base year x 100.

The comparative financial statements of synotech inc will serve as a basis for an example of horizontal analysis and vertical analysis of a balance sheet and a statement of income and retained earnings. Prepare a comparative income statement with horizontal analysis for the two year period indicating the increase decrease for the current year when compared with the previous year. To the extent the data permit comment on the significant relationships revealed by the horizontal analysis prepared in 1. Winthrop company comparative income statement for the years ended december 31 current previous year amount year amount increase decrease amount increase.

Recall that horizontal analysis calculates changes in comparative statement items or totals. Prepare a comparative income statement with horizontal analysis indicating the increase decrease for the current year when compared with the previous year.