FUNDAMENTAL ACCT PRIN TEXT+CONNECT CODE
FUNDAMENTAL ACCT PRIN TEXT+CONNECT CODE
15th Edition
ISBN: 9781265564483
Author: Wild
Publisher: MCG
Question
Book Icon
Chapter 17, Problem 3QS
To determine

Introduction:

Horizontal Percentage Analysis

• Horizontal Percentage Analysis is a technique of performance measurement and evaluation where the performance of the current year is compared to that of a base year and the direction of the results are analyzed.

• The movement of the results can be interpreted as a positive or favorable Horizontal movement or as a negative or unfavorable Horizontal movement

• Favorable Horizontals mean increase in revenues and decrease in costs and are hence subjective in nature. Unfavorable Horizontals mean decrease in revenues and increase in costs and are also subjective in nature.

• Horizontal analysis helps in evaluation of repetitive behavior as well as evaluation of effectiveness of strategies implemented by allowing analysis of performance over time.

• The following formula is used to calculate Horizontal percentage for each year:

Percentage Change in Metric = Current Year Figure / Base Year Figure &*#x00A0;100

To Calculate:

Annual Dollar changes and Percentage changes in each of the accounts.

Blurred answer
Knowledge Booster
Background pattern image
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education