Análisis HORIZONTAL de estados financieros

Analysis of Financial Statements: Horizontal Analysis

In this section, the speaker introduces the concept of horizontal analysis in financial statements, contrasting it with vertical analysis and emphasizing its practical application in decision-making within organizations.

Understanding Horizontal Analysis

• Horizontal analysis focuses on percentage changes over time in a company's financial position.

• It involves analyzing these changes reflected in financial statements to aid decision-making.

• The process includes comparing data from different periods to assess trends and performance.

• Calculating differences between periods helps identify significant changes for further analysis.

• Expressing differences as percentages provides insights into growth or decline trends.

Interpreting Percentage Changes in Financial Statements

This part delves into interpreting percentage changes resulting from horizontal analysis, illustrating how these insights can inform decision-making processes within an organization.

Interpreting Percentage Changes

• A 52.67% increase indicates growth in sales from December 2017 to December 2018.

• Understanding percentage changes helps identify key areas impacting the organization.

• Variations can be expressed as absolute or relative changes for comprehensive analysis.

• Errors like division by zero highlight critical considerations when interpreting data.

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In this section, the speaker discusses the increase in costs related to raw materials in 2018 compared to 2017 and how it impacts various financial aspects.

Raw Material Cost Increase Analysis

• The speaker highlights a 43% increase in raw material costs from December 2017 to December 2018.

• Total cost of sales rose by 197.87% in 2018 compared to the previous year, indicating a significant impact on financial outcomes.

• Gross profit decreased by 40.48% in December 2018 compared to December 2017, suggesting potential inefficiencies or challenges in cost management.

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This segment delves into the implications of reduced gross profit and declining net income for decision-making processes based on financial statements analysis.

Financial Statements Interpretation

• Net income dropped by 40.48% from December 2017 to December 2018, signaling a need for strategic adjustments.

• Understanding how to read an income statement is crucial for comprehending financial performance; viewers are encouraged to watch a linked video for further guidance.

• Despite profitability in both years, there was a notable decrease of 49.37% in net income from $11,060 previously.

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Exploring horizontal analysis methodology through examining balance sheets between two consecutive years for comprehensive financial evaluation.

Horizontal Analysis of Financial Statements

• Horizontal analysis involves comparing financial data over time rather than against benchmarks, aiding in understanding trends and changes.

• Analyzing the balance sheet reveals an overall asset increase of 87.5% from December 2017 to December 2018, reflecting business growth and expansion strategies.

• Calculating variations between current and comparative year figures provides insights into specific areas such as cash or bank balances showing a rise of 33.33%.

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Delving deeper into balance sheet analysis with a focus on liabilities and equity components alongside their percentage changes over time.

Liabilities and Equity Assessment

• A detailed examination shows liabilities like supplier debts decreased by 33.33%, while bank loans surged by $750,000 representing a substantial shift.

• Notable increases across assets indicate positive growth trends aligning with business performance improvements observed throughout the period under review.

Understanding Financial Statements

In this segment, the importance of understanding the information presented in financial statements is highlighted. The focus is on interpreting the data to comprehend how figures change over time and make informed decisions based on these variations.

Interpreting Financial Statements

• Understanding the crucial aspect of knowing what information each financial statement contains.

• Emphasizing the significance of interpreting the data within financial statements to track changes over different periods.