Horizontal analysis - income statement
In This video you will learn how to do a horizontal analysis of the income statement to learn. Trend analysis is helpful to To evaluate an organisation’s past financial performance, present financial condition and project future evolution.
If you want me to show you this last step proyect future evolution please comment below
To get a comparative percentage of all the items
Where all income statement figures for a base year equal 100 (percent) and subsequent financial statement items (in this case 2019 and 2020) are expressed as percentages of their values in comparison to the base year.
All income statement items will be divided by the base year to see the percentage changes
It is a useful tool to evaluate the trend situations & take better managerial desitions
So we can Trigger action and solve solve problems that are draining our profits.
Time stamps
0:00 Intro
0:15 Profit and loss statement / income statement / P&L
0:26 What is a horizontal analysis
1:25 Why a horizontal analysis is usefull
1:53 Base year
2:33 Horizontal analysis excel formula on subsequent years
6:10 Income statement analysis with trend percentages
9:40 Final details and focus of managerial decision
10:39 wrap up - Why is important to do a horizontal analysis of a company for your business
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