Horizontal Analysis Formula For Income Statement

Horizontal analysis involves the computation of amount changes and percentage changes from the previous to the current year.

Horizontal analysis formula for income statement. Likewise we can do the same for all the other entries in the income statement. Comparative retained earnings statement with horizontal analysis. Horizontal analysis of an income statement. A complete horizontal analysis of income statement might tell us that while our.

In above analysis 2007 is the base year and 2008 is the comparison year. Colgate horizontal analysis example. The formula for horizontal analysis can be calculated by using the following steps. Horizontal analysis of financial statement formula and calculation.

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 year 2007. Next note the amount of the line item in the comparison year. The amount of each item on the most recent. Let us now look at the horizontal analysis of colgate.

Horizontal analysis doesn t conclude with finding the change in sales over a period. Income statement horizontal analysis in millions increase or decrease 2019 2018 amount percent assets cash and cash equivalents 6 480 9 077 2 596 00 28 61 short term investments 1 467 2 025 558 00 27 56 marketable securieties 3 228 5 013 1 785 00 35 61 trade accounts receivable 3 971 3 685 306 00 7 76 inventories. Here we have the yoy growth rates of colgate s income statement from 2008 until 2015. To get a clear picture of the performance of our business we need to do a horizontal analysis of each item in our income statement.