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These are called comparative financial statements. Use the past performance of a company to predict
how it will do in the future. Horizontal analysis, also called trend analysis, is
a technique for evaluating a series of financial
statement data over a period of time.
Horizontal analysis involves expressing each item
in the current year financial statements as a
percentage of that same item in the financial
statements of another year (called the base year). Financial Statement Analysis – Module 1 Financial Statement Analysis – Module 1 The analysis below shows 2008 as the base year.
The base year s sales are subtracted from each
year s sales. Then, this difference is expressed as
a percentage of the base year s sales. In a horizontal analysis, you can also compare one
year to any other previous or subsequent year...
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- Spring '12