Financial Statement Analysis:

Introduction
 Comparative Analysis

There are two types of comparisons to

provide decision usefulness of financial
information:
● Intracompany basis
○ Intrastate highway(NM 14)
● Intercompany basis
○ Interstate highway (US 40)
○ Industry averages
 Financial Statement Analysis

Three basic tools are used in financial statement

analysis :
● Horizontal analysis
○ Compare 2010 to 2009
● Vertical analysis
○ Net Income to Net Sales
● Ratio analysis
○ Watch our ratio video
Horizontal Analysis
 Vertical Analysis
●Is a technique for evaluating
financial statement data that
expresses each item in a financial
statement as a percent of a base
amount.
●Total assets is always the base
amount in vertical analysis of a
balance sheet.