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    Horizontal Analysis of A Balance Sheet

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    Mary
    The document summarizes the horizontal analysis of Morrison Pet Supply Company's comparative balance sheet for 2013 and 2014. It shows the dollar and percentage changes in various asset, liability, and equity accounts between the two years. Cash increased by 51.0%, prepaid rent increased by 14.3%, and retained earnings increased the most at 27.3%. Total assets increased by 16.0% and total stockholders' equity increased by 19.8% from 2013 to 2014.

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    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd

    Horizontal Analysis of A Balance Sheet

    Uploaded by

    Mary
    4K views3 pages
    The document summarizes the horizontal analysis of Morrison Pet Supply Company's comparative balance sheet for 2013 and 2014. It shows the dollar and percentage changes in various asset, liability, and equity accounts between the two years. Cash increased by 51.0%, prepaid rent increased by 14.3%, and retained earnings increased the most at 27.3%. Total assets increased by 16.0% and total stockholders' equity increased by 19.8% from 2013 to 2014.

    Original Description:

    Description of how to create a horizontal Analysis of a balance sheet.

    Original Title

    Horizontal Analysis of a Balance Sheet

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    The document summarizes the horizontal analysis of Morrison Pet Supply Company's comparative balance sheet for 2013 and 2014. It shows the dollar and percentage changes in various asset, liability, and equity accounts between the two years. Cash increased by 51.0%, prepaid rent increased by 14.3%, and retained earnings increased the most at 27.3%. Total assets increased by 16.0% and total stockholders' equity increased by 19.8% from 2013 to 2014.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    4K views3 pages

    Horizontal Analysis of A Balance Sheet

    Uploaded by

    Mary
    The document summarizes the horizontal analysis of Morrison Pet Supply Company's comparative balance sheet for 2013 and 2014. It shows the dollar and percentage changes in various asset, liability, and equity accounts between the two years. Cash increased by 51.0%, prepaid rent increased by 14.3%, and retained earnings increased the most at 27.3%. Total assets increased by 16.0% and total stockholders' equity increased by 19.8% from 2013 to 2014.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3
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    The document provides instructions for performing horizontal analysis on a comparative balance sheet and an example of Morrison Pet Supply Company's balance sheet analyzed horizontally.

    Horizontal analysis is a technique for analyzing changes in the amounts of corresponding financial statement items over a period of time. The steps involve subtracting amounts between years, dividing by the base year amount, and multiplying by 100 to get percentages.

    According to the example, Cash, Prepaid Rent, Supplies, Land, Equipment, and Retained Earnings saw increases from 2013 to 2014.

    Horizontal Analysis Method

    Morrison Pet Supply Company


    Comparative Balance Sheet
    Horizontal Analysis
    Account Title

    2013

    2014

    Amount

    Percent

    Assets
    Cash

    10,000

    15,100

    5,100

    51.0%

    Accounts Receivable

    6,200

    6,300

    100

    1.6%

    Prepaid Rent

    3,500

    4,000

    500

    14.3%

    Inventory

    8,000

    7,500

    (500)

    (6.3%)

    500

    800

    300

    60.0%

    Land

    25,000

    30,000

    5,000

    20.0%

    Build

    15,000

    15,000

    0.0%

    0.0%

    500

    5.6%

    200

    5.6%

    10,800

    16.0%

    Supplies

    Accumulated Depreciation-Building
    Equipment

    6,000
    9,000

    Accumulated Depreciation-Equipment
    Total Assets

    6,000
    9,500

    3,600
    67,600

    3,800
    78,400

    Liabilities
    Notes Payable

    9,000

    8,500

    (500)

    (5.6%)

    Accounts Payable

    4,000

    4,500

    500

    12.5%

    Salaries & Wages Payable

    1,200

    1,400

    200

    16.7%

    250

    350

    100

    40.0%

    Total Liabilities

    14,450

    14,750

    300

    2.1%

    Common Stock

    33,000

    38,000

    5,000

    15.2%

    Retained Earnings

    20,150

    25,650

    5,500

    27.3%

    Total Stockholders' Equity

    53,150

    63,650

    10,500

    19.8%

    Total Liabilities & Stockholders' Equity

    67,600

    78,400

    10,800

    16.0%

    Unearned Pet Supplies Revenues

    Revised 1/2014 MJC

    Page 1

    Horizontal Analysis Method


    Instructions
    Step 1. Place your three header lines at the top of the page. (Company name, title of statement,
    and type of analysis)
    Step 2. Create the balance sheet with four column for two years of the companys financial
    data. Add two more columns to the right and label them Amount and Percent.
    Step 3. Now subtract the amount in the past year from the amount in the current year the get
    the difference in the years amounts.
    Example: Cash 2014 Cash 2013 = Difference (Amount)
    15,100 10,000 = 5,100
    Step 4. Now divide the difference (Amount) by the base year which is the oldest year to get the
    decimal.
    Example: Cash difference (Amount) / Cash 2013 = decimal
    5,100 / 10,000 = 0.51
    Step 5. Multiply the answer in step 4 by 100 to get the percentage. Round to the nearest tenth
    of a percent (one place past the decimal (i.e. 29.1).
    Example: Cash decimal X 100 = 51.0%
    Step 6. Repeat steps 3 through 5 for every line across to get the answers for each line.

    Revised 1/2014 MJC

    Page 2

    Horizontal Analysis Method


    Morrison Pet Supply Company
    Comparative Balance Sheet
    Horizontal Analysis
    Account Title

    Assets
    1

    Cash

    2013

    2014

    Amount

    Percent

    10,000

    15,100

    = C1-A1

    =E1/A1X100

    Accounts Receivable

    6,200

    6,300

    = C2-A2

    =E2/A2X100

    Prepaid Rent

    3,500

    4,000

    = C3-A3

    =E3/A3X100

    Inventory

    8,000

    7,500

    = C4-A4

    =E4/A4X100

    Supplies

    500

    800

    = C5-A5

    =E5/A5X100

    Land

    25,000

    30,000

    = C6-A6

    =E6/A6X100

    Build

    15,000

    15,000

    = C7-A7

    =E7/A7X100

    Accumulated Depreciation-Building

    = D8-B8

    =E8/B8X100

    Equipment

    = C9-A9

    =E9/A9X100

    10

    Accumulated Depreciation-Equipment

    = D10-B10

    =E10/B10X100

    11

    Total Assets
    Liabilities

    = C11-A11

    =E11/A11X100

    6,000
    9,000

    6,000
    9,500

    3,600
    67,600
    A

    3,800
    78,400
    C

    14

    Notes Payable

    9,000

    8,500

    = D14-B14

    =E14/B14X100

    15

    Accounts Payable

    4,000

    4,500

    = D15-B15

    =E15/B15X100

    16

    Salaries & Wages Payable

    1,200

    1,400

    = D16-B16

    =E16/B16X100

    17

    Unearned Pet Supplies Revenues

    250

    350

    = D17-B17

    =E17/B17X100

    18

    Total Liabilities

    14,450

    14,750

    = D18-B18

    =E18/B18X100

    19

    Common Stock

    33,000

    38,000

    = D19-B19

    =E19/B19X100

    20

    Retained Earnings

    20,150

    25,650

    = D20-B20

    =E20/B20X100

    21

    Total Stockholders' Equity


    Total Liabilities & Stockholders'
    Equity

    53,150

    63,650

    = D21-B21

    =E21/B21X100

    67,600

    78,400

    = D22-B22

    =E22/B22X100

    22
    23

    Revised 1/2014 MJC

    Page 3

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