Guide to Horizontal Analysis. We discuss the formula of horizontal analysis on the income statement and balance sheet with examples.

Here’s the deal: horizontal analysis involves taking specific line items from your financial statements and comparing them over consecutive periods. Think year-over-year revenue …

Whereas vertical analysis analyzes a particular financial statement using only one base financial statement of the reporting period, horizontal analysis compares a specific financial statement …

Apr 20, 2024 · What is Horizontal Analysis? Horizontal Analysis measures a company’s operating performance by comparing its reported financial statements, i.e. the income statement and …

For example, if management determines that increased earnings per share are due to an increase in revenue or a drop in the cost of goods sold (COGS), the horizontal analysis can corroborate.

Jun 13, 2023 · Horizontal analysis also makes it easier to detect when a business is underperforming. For example, if a company starts generating low profits in a particular year, …

Master Horizontal Analysis with free video lessons, step-by-step explanations, practice problems, examples, and FAQs. Learn from expert tutors and get exam-ready!

Jul 24, 2024 · What is an Example of Horizontal Analysis? An example of horizontal analysis is comparing amounts from a company’s balance sheet or income statement over subsequent …

Nov 23, 2025 · For example, a horizontal analysis of employee benefits expense over multiple periods could be used to spot an increase in medical insurance rates, while the same analysis …

Oct 18, 2024 · Analyze trends in financial statements with horizontal analysis - includes formula and examples.