Comparative Income Statement With Horizontal Analysis

When calculating growth look at the percentage of change between accounting periods.

Comparative income statement with horizontal analysis. 2018 2017 increase decrease rm rm amount revenue 266 274 621 244 151 411 22 123 210 9. Recall that horizontal analysis calculates changes in comparative statement items or totals. Horizontal analysis of financial statement formula and calculation. Round percentages to one decimal place 2.

Let us now look at the horizontal analysis of colgate. One of the popular techniques of comparative income statement which shows the change in amount both in absolute and percentage terms over a period of time. 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. Comparative retained earnings statement with horizontal analysis.

1 amount change current year amount base year amount 2 percentage change amount of change div. In above analysis 2007 is the base year and 2008 is the comparison year. Types of comparative income statement analysis 1 horizontal analysis. We calculate the growth rate of each of the line items with respect to the previous year.

A horizontal or time series analysis looks at trends over time. In the horizontal analysis the financial data of the companies is compared to the base of the comparative financial statement for fixing the problems within the. Comparative income statement with horiz0ntal analysis formula. Likewise we can do the same for all the other entries in the income statement.

Colgate horizontal analysis example. The percentage analysis of increases and decreases in corresponding items in comparative financial statements is called horizontal analysis. The amount of each item on the most recent. You can see growth patterns and seasonality.

Consider the following example of comparative income statement analysis. All items on the balance sheet and income statement for the year 2008 have been compared with the items of balance sheet and income statement for the. Here we have the yoy growth rates of colgate s income statement from 2008 until 2015. Comparative income statement with horizontal analysis.

Prepare a comparative income statement with horizontal analysis for the two year period using 20y1 as the base year. Base year amount x 100 comparative income statement for the year ended 31 2018 2017. To the extent the data permit comment on the significant relationships revealed by the horizontal analysis prepared in 1. Horizontal analysis involves the computation of amount changes and percentage changes from the previous to the current year.

Horizontal analysis is the method of function statement analysis which represents the percentage income and percentage decrease.