Horizonal Analysis & "Company Specific" Metrics

Front

What does a Balance Sheet primarily describe?

Back

Assets, Liabilities, and Equity

Front

Which financial statement tells the story about a company's profitability?

Back

P&L (Income Statement)

Front

Which statement provides information about how much cash came in or went out of the company?

Back

Cash Flow Statement

Front

What is the purpose of comparing metrics to an important total number within your business?

Back

To track meaningful averages specific to your industry

Front

Why is it important to analyze both absolute and relative changes in financial analysis?

Back

Because either may appear large or small on its own

Front

What does analyzing absolute and relative changes together help prevent ?

Back

Overlooking small but significant changes

Front

What is the primary objective of Comparative Horizontal Analysis?

Back

To find and identify changes over a specific period

Front

In Comparative Horizontal Analysis, what does an absolute change represent?

Back

Difference in value for all line items in dollar amounts

Front

Calculate relative change in sales. 

Year 1 Sales: 1000

Year 2 Sales: 4000

Back

300%

Front

What should be analyzed in Comparative Horizontal Analysis when large changes occur in one account?

Back

Related accounts for similar changes