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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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