Horizontal Analysis of the Income Statement

[@makebabradshaw6135]

Thank you for being simple and to the point.

[@allkristiningram]

+Makeba Bradshaw you're welcome. Thanks for commenting!

[@jennifermugun9424]

Great explanation. Made a lot of sense to me.

[@allkristiningram]

Glad it was helpful!

[@themadscientistprofessor]

i love your videos there are so many good teachers who are on youtube so so helpful thanks a million

[@allkristiningram]

You're welcome! Glad I could help.

[@michelleorta2626]

Very straight and to the point!!!

[@allkristiningram]

Glad it helped!

[@mariamagandi3777]

I think your tutorial is great and helpful. It helps us the beginners to easily understand the vertical method

[@allkristiningram]

Thanks so much!

[@HerCreativeLight]

very helpful :) do you have a video for vertical analysis ?

[@allkristiningram]

Prabh Gill I don't have a video on vertical analysis yet. Vertical analysis is actually easier than horizontal. In a vertical analysis, you are converting all of your numbers into a percentage of the largest number on the statement. For an income statement, each line item is expressed as a percentage of sales. Take each line item and divide it by total sales. For COGS, take COGS/Total Sales. Repeat this for each item on the statement. This is really easy to do in Excel. For the balance sheet, each line item is expressed as a percentage of assets (or liabilities and equity since it is the same as assets). Take each line item and divide it by total assets. For cash and cash equivalents, take cash and cash equivalents/total assets. Repeat this for each item on the statement.

[@clarissaavenido2038]

How would you know which year has a better performance?

[@allkristiningram]

You would need to have three years of information to know which year is doing better if you are doing a horizontal analysis. A vertical analysis might be better if you only have two years of data.

[@clarissaavenido2038]

Thank you so much! 😊

[@sydbarnes9006]

Would you expect the gross profit increase to be similar to the net profit increase.?. Just looking at this I would say the office is efficient but something is not quiet right in the factory

[@allkristiningram]

If the company is holding the line on expenses across the board, the increases could be similar but that is not always the case.

[@joystevens87]

Thank You. Your video was very helpful and clear.

[@allkristiningram]

Glad it was helpful!

[@andreadevera7570]

thank you so much! this helped a lot

[@allkristiningram]

You're welcome! I'm glad it helped.

[@bettymiranda9942]

better explanation than other videos. I understood the percentage

[@allkristiningram]

I'm so glad you were able to understand the concept. Thanks for commenting!

[@johnlloyddeleon6224]

what are the possible reasons if the amount of the Property, plant and equipment (PPE) has greatly increased after a year ??

[@allkristiningram]

We are unable to help with specific homework or test problems as it may violate the academic honesty policy of your university.

[@SuperLalagogo]

I have a question, what if comparing 3 years together, which year to look at for better explanation?

[@allkristiningram]

You always compare the most current year to the immediate prior year.

[@ismailismaili0071]

i just learned how to interpret financial statements thank you so much teacher

[@lisahoweperry9785]

This was helpful and easy to understand

[@allkristiningram]

+Lisa HowePerry thank you! I'm glad I could help

[@TS_HorusFx]

Thanks for this :) Really helpful!

[@allkristiningram]

+Antonio Wazowski You're welcome! So glad I could help!

[@shondalathomas3133]

Thank you. Very helpful!

[@allkristiningram]

+Shondala Thomas Glad I could help! Thanks for commenting!

[@sigridliang4607]

Thank you so much. It is really helpful.

[@allkristiningram]

+Sigrid Liang You're welcome. Thank you for commenting.

[@RaulRodriguez-vt5dc]

Thanks for this video!

[@allkristiningram]

You're welcome!

[@gautiercochainarnoux3117]

thank you very much for your help!

[@allkristiningram]

+Gautier Cochain Arnoux you're welcome. Thanks for commenting!

[@andarius1654]

Thank you so much for this.

[@allkristiningram]

You're welcome.

[@atifaripa6897]

Thanks a lot❤

[@allkristiningram]

You're welcome 😊

[@kimmoyt189]

this amazing thank you sooooo much

[@allkristiningram]

You're welcome! Thanks for commenting!

[@margaritagonzalez930]

very helpful!!

[@allkristiningram]

Thank you for commenting. Glad I could help.

[@allkristiningram]

+Margarita Gonzalez thanks for commenting!

[@Alchemist1717]

Very helpful :)

[@allkristiningram]

Thank you!

[@halaambe]

the volume is really low but this is good.

[@allkristiningram]

I will check into the volume. Thanks for commenting.

[@faizfaizi8956]

thank u so much

[@allkristiningram]

You're welcome!