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Analysis of Competition Bikes Inc.
Finance & Accounting
Pages 6 (1506 words)
Analysis of Competition Bikes Inc. Analysis of Financial Statements Type your name here 8/30/2011 Horizontal Analysis of Competition Bikes Inc. The horizontal analysis of fundamental financial statements means comparing the financial data of a company for two or more years and it is termed as horizontal analysis because the analyst compares the current item on the statement with the corresponding item on the previous year’s statement.
Income Statement is one of the fundamental financial statement that provides results of revenues, earnings, and EPS (Earning Per Share). The income statement provides a consolidated view of the revenue a company earned, the expenses it incurred and its effect on the bottom line, i.e. the profit during a certain period of time. It is a mirror to the investors reflecting on company performance and its potential to perform. Essentially a company should be earning more than it is spending and thus signal profit earning opportunity to the investors. The horizontal analysis of the Income Statement of Competition Bikes Inc. would compare the performance of the company during the year 2006-2008. The following is a snapshot of the Income Statement of company during 2006-2008 along with its horizontal analysis. We have compared the Income Statement of 2007 keeping 2006 as the base year and then analyzed the performance of 2008 keeping 2007 as the year of reference. Horizontal Analysis of Income Statement 2006-2007 As we have mentioned earlier, there are two major sections of an Income Statement: Revenue, Expenses, and Profit. Revenue minus the expenses is the profit and we would look at the company’s change in revenue and overall expenses during the period of 2006-2008. ...
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