{"id":387,"date":"2024-09-06T16:49:20","date_gmt":"2024-09-06T16:49:20","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/introduction-to-comparative-analysis-of-financial-statements\/"},"modified":"2024-09-06T16:49:20","modified_gmt":"2024-09-06T16:49:20","slug":"introduction-to-comparative-analysis-of-financial-statements","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/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":"\n<h2>What you will learn to do: Compare financial statements: intercompany and intracompany<\/h2>\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.\n\nIntracompany means within a single company, and can be either a horizontal analysis or vertical or often a combination of both.\n<ul>\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>\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>\n<\/ul>\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.\n","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","protected":false},"author":6,"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 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