The horizontal analysis of the balance sheet involves the study of the main indicators of the company's reporting for a certain period, the calculation of the rate of their changes, as well as the assessment of the obtained ratios.
Instructions
Step 1
Build an analytical table to make a horizontal analysis of the balance sheet or its application, for example, a profit statement. In it, it is necessary to calculate the absolute changes in each indicator taken from the balance sheet, and calculate the relative growth rates. Based on the obtained values, you can draw several conclusions about the trend of the hotel balance ratios, as well as about its values in general.
Step 2
Analyze the dynamics of enterprise assets, their structure and changes. Then give them a rating. Note how their value changed, due to which their increase or decrease could occur. Next, assess the state of the dynamics of non-current and circulating assets, identify how these indicators influenced the change in the entire total composition of assets.
Step 3
Specify due to what factors there was a decrease or increase in the growth rate of non-current and current assets. Draw conclusions about which types of assets could have a greater impact on the change in the balance sheet currency.
Step 4
Analyze the dynamics of the sum of liabilities, as well as its change. Start by assessing the value of liabilities as a whole, then compare them with previous periods. Select the most changed ratios and determine how they could affect the increase or decrease in the total amount of liabilities.
Step 5
Note the reason for the changes in the size of equity and debt capital. Then highlight the most significant elements that led to significant changes in the amount of liabilities.
Step 6
Try to identify the connection between changes in absolute indicators and the situation that has developed at the enterprise. At the same time, the balance will be satisfactory if the total value in it tends to increase, and the growth rate of the amount of non-current assets will be lower than that of current assets.
