For example, when you hear someone sayingthat revenues increased by 10% this past quarter,that person is using horizontal analysisHorizontal analysis can be used on any item in acompany's financials (from revenues to earningsper share), and is useful when comparingthe performance ofvarious companies.6
6 ⚫ For example, when you hear someone saying that revenues increased by 10% this past quarter, that person is using horizontal analysis. ⚫ Horizontal analysis can be used on any item in a company's financials (from revenues to earnings per share), and is useful when comparing the performance of various companies
Value CityBalance SheetDecember 31.200920092008AssetsCash77,00083,800Supplies208,600140,000Accounts10,8007,100ReceivablePPE222,200192.700423,600Totalassets518.600
7 Value City Balance Sheet December 31,2009 2009 2008 Assets Cash 77,000 83,800 Supplies 208,600 140,000 Accounts Receivable 10,800 7,100 PPE 222,200 192,700 Total assets 518,600 423,600
20082009Assetswhy?Cash100%-8.11%49%100%Supplieswhy?100%52.11%AccountsReceivablePPE100%15.31%100%22.43%Total assets8
8 2009 2008 Assets Cash -8.11% 100% Supplies 49% 100% Accounts Receivable 52.11% 100% PPE 15.31% 100% Total assets 22.43% 100% why? why?
20092008Liabilities and Owner's EquityLiabilities233,600287,200AccountsPayable59,80038,800Notes Payable11.80012.100Long-term liability284,500Total Liabilities358,800EquityPaid-in Capital27,50027,500Retained Earnings132.300111.600159.800139.100Total EquityTotal Liabilities and518.600423.600Owner'sEquity9
9 2009 2008 Liabilities and Owner’s Equity Liabilities Accounts Payable 287,200 233,600 Notes Payable 59,800 38,800 Long-term liability 11,800 12,100 Total Liabilities 358,800 284,500 Equity Paid-in Capital 27,500 27,500 Retained Earnings 132,300 111,600 Total Equity 159,800 139,100 Total Liabilities and Owner’s Equity 518,600 423,600
20092008Liabilities and Owner's EquityLiabilities100%22.95%Accounts Payable100%54.12%Notes Payable??-2.48%100%Long-term liability100%26.12%Total LiabilitiesEquity0100%Paid-in Capital??100%RetainedEarnings18.55%14.88%100%Total Equity22.43%100%Liabilitiesand Owner'sEquity10
10 2009 2008 Liabilities and Owner’s Equity Liabilities Accounts Payable 22.95% 100% Notes Payable 54.12% 100% Long-term liability -2.48% 100% Total Liabilities 26.12% 100% Equity Paid-in Capital 0 100% Retained Earnings 18.55% 100% Total Equity 14.88% 100% Liabilities and Owner’s Equity 22.43% 100% ?? ??