INSTITUTE-UNIVERSITY SCHOOL OF

BUSINESS
DEPARTMENT-MBA
Master of Business Administration
Financial Reporting and Analysis
20BAT612
Dr. Vikas Tyagi
Associate Professor
HORIZONTAL ANALYSIS
DISCOVER . LEARN . EMPOWER
 HORIZONTAL
ANALYSIS

Course Outcome
CO Title Level
Number

CO1 To impart understanding of the Basic Principles of Remember Will be covered in this
Accounting, Accounting Standards, Reading and Analyzing   lecture
Balance sheets and its application in modern day business
CO2 To prepare various financial statements i.e. trading Understand
account, Profit and loss account and balance sheet, P/L  
Appropriation account, cash flow statement etc.
CO3 To provide knowledge of concepts those are helpful in Understand
financial decision making

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It is a systematic process of the critical
examination of the financial information
contained in the financial statements in order to
understand and make decisions regarding the
operations of the firm

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HORIZONTAL ANALYSIS:

These are the statements showing the profitability and financial

position of a firm for different periods of time in a comparative
form to give an idea about the position of two or more periods.

It usually applies to the two important financial statements, namely,

balance sheet and statement of profit and loss prepared in a
comparative form.

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These are the statements showing the profitability and financial
position of a firm for different periods of time in a comparative form
to give an idea about the position of two or more periods.

The financial data will be comparative only when same accounting

principles are used in preparing these statements.

Comparative figures indicate the trend and direction of financial

position and operating results.

This analysis is also known as ‘horizontal analysis’.

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The following steps may be followed to prepare the comparative
statements:

Step 1 : List out absolute figures in rupees relating to two points of time

Step 2 : Find out change in absolute figures by subtracting the first year
from the second year (Col.3) and indicate the change as increase (+) or
decrease (–) and put it in column 4.

Step 3 : Preferably, also calculate the percentage change as follows and

put it in column 5.

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 Assessment Pattern

Blackboard
Assessment Pattern

Components HT-1 HT-2 Assignment Surprise Test Business Quiz GD Forum Attendance Scaled
Marks

Max. Marks 10 10 6 4 4 4 2 40

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 References

• Reference book- Maheshwari S.N, Accounting for Management, Vikas Publishing House, New Delhi,2010
• Reference Website: https://www.investopedia.com/terms/f/financial-statement-analysis.asp
• Reference Journal for advance study: Journal of Accountancy (JOA)

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THANK YOU

For queries
Email: vikas.e8077@cumail.in