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3 cards from this section. Quick, good the night before a test.
What is horizontal analysis?
Focus on the comparison aspect.
Define comparative financial statements.
Think of year-to-year comparisons.
What does horizontal analysis primarily involve?
Recall that it deals with time-based comparisons.
True or False: Horizontal analysis only focuses on the current year’s data.
Think about the nature of the analysis.
If a company's net profit for the years 2021, 2022, and 2023 were ₹1,00,000, ₹1,50,000, and ₹2,00,000, create a horizontal analysis and suggest two actions the company might take based on these findings.
Calculate the growth and consider strategic responses to positive trends.
Analyze a scenario where a company’s sales decreased from ₹2,00,000 in 2021 to ₹1,50,000 in 2022. Propose recommendations based on your horizontal analysis.
Focus on identifying the cause of the decline and target areas for improvement.
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