Homework Answers
Horizontal analysis of financial statement is one of the most important techniques to find out how company is doing financially
Horizontal analysis formula= Amount in comparision Year - Amount in base year * 100
Amount in base Year
| PARTICULARS | current year | previous year | Horizontal ANALYSIS |
| NET SALES | 43251 | 39474 | 9.6% |
| COST OF SALES | 20351 | 18038 | 12.8% |
| SELLING & ADM | 15965 | 14266 | 11.9% |
| OPERATING INCOME | 6935 | 7170 | -3.3% |
| OTHER INCOME | 86 | 461 | -14% |
| INCOME BEFORE TAXES | 7021 | 7631 | -8% |
| PROVISION FOR INCOME TAX | 1879 | 1973 | -4.8% |
| NET INCOME | 5142 | 5658 | -9.1% |
AS PER THE GIVEN INFORMATON FROM HORIZONTAL ANALYSIS IT CAN BE CONCLUDED THAT COMPANY SALES HAVE INCREASED AS COMPARISION TO PREV YEAR BUT INCREAMENT IN SALES HAS LED TO INCREASE IN COST OF SALES BY 12.8% AND SELLING & ADMIS EXP BY 11.9% WHICH HAS RESULTED IN LOSS OF INCOME BY 9.1% AS COMPARISON TO PREVIOUS YEAR ,
THE DATA CLEARLY SHOWS THAT TO INCREASE THE PROFIT COMPANY HAS TO REDUCE ITS SELLING AND ADMISTARTIVE EXP BECAUSE WE CAN SEE THE SALES HAS INCREASED BY 9.6% BUT EXPENSES WHICH ARE DONE TO INCREASE SALES ARE FAR MORE THAN SALES RESULTS WE GET.
SO COMPANY NOT SHOWING FRUITFULL RESULTS.
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