{"id":4154,"date":"2020-10-26T16:39:58","date_gmt":"2020-10-26T16:39:58","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-financialaccounting\/?post_type=chapter&#038;p=4154"},"modified":"2020-11-16T17:30:08","modified_gmt":"2020-11-16T17:30:08","slug":"introduction-to-comparative-analysis-of-financial-statements","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/chapter\/introduction-to-comparative-analysis-of-financial-statements\/","title":{"raw":"Introduction to Comparative Analysis of Financial Statements","rendered":"Introduction to Comparative Analysis of Financial Statements"},"content":{"raw":"<h2>What you will learn to do: Compare financial statements: intercompany and intracompany<\/h2>\r\n<img class=\"alignright  wp-image-5882\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/16172953\/planning-financial-1024x660.jpg\" alt=\"A cartoon depiction of a businessman examining a pie chart and bar graph.\" width=\"400\" height=\"258\" \/>Intercompany means between companies, and may also include comparisons to industry averages.\r\n\r\nIntracompany means within a single company, and can be either a horizontal analysis or vertical or often a combination of both.\r\n<ul>\r\n \t<li style=\"font-weight: 400;\"><strong>Horizontal analysis<\/strong> involves laying out periods of information side by side in order to analyze trends.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Vertical analysis<\/strong> looks at line items in a single period as a percentage of some base amount and is sometimes referred to as common-size analysis.<\/li>\r\n<\/ul>\r\nYou could take common-size financial statements and lay them out side by side in order to analyze the trends, such as changes in gross profit percentage.","rendered":"<h2>What you will learn to do: Compare financial statements: intercompany and intracompany<\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright  wp-image-5882\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/16172953\/planning-financial-1024x660.jpg\" alt=\"A cartoon depiction of a businessman examining a pie chart and bar graph.\" width=\"400\" height=\"258\" \/>Intercompany means between companies, and may also include comparisons to industry averages.<\/p>\n<p>Intracompany means within a single company, and can be either a horizontal analysis or vertical or often a combination of both.<\/p>\n<ul>\n<li style=\"font-weight: 400;\"><strong>Horizontal analysis<\/strong> involves laying out periods of information side by side in order to analyze trends.<\/li>\n<li style=\"font-weight: 400;\"><strong>Vertical analysis<\/strong> looks at line items in a single period as a percentage of some base amount and is sometimes referred to as common-size analysis.<\/li>\n<\/ul>\n<p>You could take common-size financial statements and lay them out side by side in order to analyze the trends, such as changes in gross profit percentage.<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-4154\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Introduction to Comparative Analysis of Financial Statements. <strong>Authored by<\/strong>: Joseph Cooke. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Principles of Financial Accounting. <strong>Authored by<\/strong>: Christine Jonick. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/web.ung.edu\/media\/university-press\/Principles-of-Financial-Accounting.pdf?t=1601063299615\">https:\/\/web.ung.edu\/media\/university-press\/Principles-of-Financial-Accounting.pdf?t=1601063299615<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><li>Modification of Image: Planning Finance. <strong>Authored by<\/strong>: mohamed Hassan. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/pixabay.com\/illustrations\/planning-finance-business-4077086\/\">https:\/\/pixabay.com\/illustrations\/planning-finance-business-4077086\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/cc0\">CC0: No Rights Reserved<\/a><\/em>. <strong>License Terms<\/strong>: https:\/\/pixabay.com\/service\/terms\/#license<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":90270,"menu_order":25,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Introduction to Comparative Analysis of Financial Statements\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Principles of Financial Accounting\",\"author\":\"Christine Jonick\",\"organization\":\"\",\"url\":\"https:\/\/web.ung.edu\/media\/university-press\/Principles-of-Financial-Accounting.pdf?t=1601063299615\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Modification of Image: Planning Finance\",\"author\":\"mohamed Hassan\",\"organization\":\"\",\"url\":\"https:\/\/pixabay.com\/illustrations\/planning-finance-business-4077086\/\",\"project\":\"\",\"license\":\"cc0\",\"license_terms\":\"https:\/\/pixabay.com\/service\/terms\/#license\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-4154","chapter","type-chapter","status-publish","hentry"],"part":857,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/4154","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/users\/90270"}],"version-history":[{"count":7,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/4154\/revisions"}],"predecessor-version":[{"id":5883,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/4154\/revisions\/5883"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/parts\/857"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/4154\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/media?parent=4154"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=4154"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/contributor?post=4154"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/license?post=4154"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}