Income Statement Horizontal Analysis Example

Horizontal analysis may be conducted for balance sheet income statement schedules of current and fixed assets and statement of retained earnings.

Income statement horizontal analysis example. With horizontal analysis we look across the income statement at the year over year yoy change in each line item. 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. Don t use plagiarized sources. Horizontal analysis formula example 2 let us take the annual report of apple inc.

Horizontal analysis of an income statement horizontal analysis doesn t conclude with finding the change in sales over a period. Go to the alternative version. Horizontal analysis of income statement and balance stratosphere a three year horizontal analysis of the income statement and balance sheet of your selected company. An example of the horizontal analysis of balance sheet schedule of current assets income statement and statement of retained earnings is given below.

Get your custom essay. The analysis computes the percentage change in each income statement account at the far right. In order to perform this exercise you need to take the value in period n and divide it by the value in period n 1 and then subtract 1 from that number to get the percent change. We need to horizontal analysis on this company.

In this case we will be using the income. This income statement shows that the company brought in a total of 4 358 billion through sales and it cost approximately 2 738 billion to achieve those sales for a gross profit of 1 619 billion. Here s an example of an income statement from a fictional company for the year that ended on september 28 2019.