Horizontal Analysis Of Income Statement In Excel

In other words it indicates the change either in absolute terms or as percentage change year over year y o y in each of the line items.

Horizontal analysis of income statement in excel. Whereas in vertical analysis of an income statement all the amount from all 3 major categories of accounts in an income statement viz. Comparative retained earnings statement with horizontal analysis. Monthly quarterly or yearly comparative evolution are the most common in this analysis. Download horizontal and vertical analysis excel balance sheet spreadsheet example.

Understand below what a horizontal and vertical analysis is. Incomes expenses and taxes represent. 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. Here we have the yoy growth rates of colgate s income statement from 2008 until 2015.

Colgate horizontal analysis example. 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. In above analysis 2007 is the base year and 2008 is the comparison year. Likewise we can do the same for all the other entries in the income statement.

Income statement horizontal analysis is the technique of evaluating financial statements analysis to know the changes in the amounts of corresponding items over a period. We calculate the growth rate of each of the line items with respect to the previous year. Now it s time to look at a different way to evaluate the income statement. What is horizontal analysis.

The term horizontal analysis refers to the financial statement analysis in historical data from the income statement balance sheet and cash flow statement is compared with each other. Excel horizontal analysis vertical analysis. It evaluates the evolution of balance sheet or income statement elements. By just looking at an income statement or a balance sheet it can be difficult to interpret all the dollar amounts from one accounting period to another or to interpret one company s financial records compared to another s over a period of time.

With horizontal analysis we look across the income statement at the year over year yoy year over year yoy stands for year over year and is a type of.