{"id":40335,"date":"2025-10-14T13:55:55","date_gmt":"2025-10-14T13:55:55","guid":{"rendered":"https:\/\/certifeka-edu.com\/programs\/finance-for-strategic-managers-accounting-professional-certificate-2\/lessons\/lesson-9-tools-to-evaluate-the-significance-of-financial-statement-data-2\/"},"modified":"2025-10-14T13:55:55","modified_gmt":"2025-10-14T13:55:55","slug":"lesson-9-tools-to-evaluate-the-significance-of-financial-statement-data-2","status":"publish","type":"lesson","link":"https:\/\/certifeka-edu.com\/ar\/programs\/sample-course\/lessons\/lesson-9-tools-to-evaluate-the-significance-of-financial-statement-data-2\/","title":{"rendered":"Lesson 9: tools to evaluate the significance of financial statement data."},"content":{"rendered":"

\"\"\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

Lesson 9: Financial Statement Analysis
\n<\/h2>\n

Horizontal analysis
\n<\/h3>\n

Also called trend analysis, is a technique for evaluating a series of financial statement data over a period of time.<\/h5>\n
Its purpose is to determine the increase or decrease that has taken place.<\/h5>\n
This change may be expressed as either an amount or a percentage.<\/h5>\n

\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\"\"
\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

If we assume that 2011 is the base year, we can measure all percentage increases or decreases from this base period amount as follows.<\/h5>\n

\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

For example, we can determine that net sales for Macy’s increased from 2011 to 2012 approximately 4.9% [($27,686 – $26,405) \/ $26,405].<\/h5>\n
Similarly, we can determine that net sales increased from 2011 to 2013 approximately 5.8% [($27,931 – $26,405) \/ $26,405].<\/h5>\n
Alternatively, we can express current year sales as a percentage of the base period<\/h5>\n
We do this by dividing the current year amount by the base year amount, as shown below.<\/h5>\n

\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\"\"
\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

BALANCE SHEET<\/h3>\n

To further illustrate horizontal analysis, we will use the financial statements of Quality Department Store Inc., a fictional retailer.<\/h5>\n

\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

INCOME STATEMENT
\n<\/h3>\n

\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

RETAINED EARNINGS STATEMENT
\n<\/h3>\n

\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

Horizontal analysis advantage & disadvantage<\/h3>\n
\n\n\t\t\t\t\t Advantage :
\n\t\t\t<\/path><\/svg>
\n\t\t\t<\/path><\/svg>
\n\t\t\t\t\t\t<\/summary>\n
straightforward and is quite useful.<\/h5>\n<\/details>\n
\n\n\t\t\t\t\t Disadvantage:
\n\t\t\t<\/path><\/svg>
\n\t\t\t<\/path><\/svg>
\n\t\t\t\t\t\t<\/summary>\n
– If an item has no value in a base year or preceding year but does have a value in the next year, we cannot compute a percentage change.<\/h5>\n
– Similarly, if a negative amount appears in the base or preceding period and a positive amount exists the following year (or vice versa), no percentage change can be computed<\/h5>\n<\/details>\n
straightforward and is quite useful.<\/h5>\n
– If an item has no value in a base year or preceding year but does have a value in the next year, we cannot compute a percentage change.<\/h5>\n
– Similarly, if a negative amount appears in the base or preceding period and a positive amount exists the following year (or vice versa), no percentage change can be computed<\/h5>\n","protected":false},"comment_status":"open","ping_status":"closed","template":"","class_list":["post-40335","lesson","type-lesson","status-publish","hentry"],"yoast_head":"\nLesson 9: tools to evaluate the significance of financial statement data. - Certifeka-edu<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/certifeka-edu.com\/ar\/programs\/sample-course\/lessons\/lesson-9-tools-to-evaluate-the-significance-of-financial-statement-data-2\/\" \/>\n<meta property=\"og:locale\" content=\"ar_AR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Lesson 9: tools to evaluate the significance of financial statement data. - Certifeka-edu\" \/>\n<meta property=\"og:description\" content=\"Lesson 9: Financial Statement Analysis Horizontal analysis Also called trend analysis, is a technique for evaluating a series of financial statement data over a period of time. 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