Loose Leaf for Fundamentals of Accounting Principles and Connect Access Card
Loose Leaf for Fundamentals of Accounting Principles and Connect Access Card
22nd Edition
ISBN: 9781259542169
Author: John J Wild
Publisher: McGraw-Hill Education
Question
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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

Chapter 17 Solutions

Loose Leaf for Fundamentals of Accounting Principles and Connect Access Card

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