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How to use Horizontal analysis to analyze income statement (Part 2), identify trends, spot issues and make recommendations from analysis.

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Continuing from Part 1, in this Part 2 video, I explain horizontal analysis and how to perform the analysis to compare two or more periods, when there is a decrease in sales. The example income statement I use is a real life example of the income statement or profit and loss statement of Coca Cola company. So, these are real numbers we are looking at. We look at each income statement line item and one by one try to understand the performance, and identify the positives and negatives, ask questions to help understand the performance better.

Follow me as I calculate variances in amounts and percentages, and explain what they represent. Then I ask questions and make recommendations based on the analysis performed. I have seen this analysis done incorrectly in the past, so I try to share my thoughts from my practical experience of a horizontal analysis as it would be done in a real life workplace.

Towards the end of the video, I show you how you can go to a publicly listed company's website, and download information such as their financial statements and analysis of gross profit margin and operating margin.

Hope you find the information in the video helpful. If you like to watch more videos in accounting, financial analysis and controller ship, videos that help you directly in doing your job, subscribe to my channel. If you liked the video, I would love if you could LIKE it and leave a comment. If you have any questions or feedback, again leave a comment. Lets stay connected at #learnaccountingfinance.