Horizontal Analysis


DEFINITION of 'Horizontal Analysis'

A procedure in fundamental analysis in which an analyst compares ratios or line items in a company's financial statements over a certain period of time. The analyst will use his or her discretion when choosing a particular timeline; however, the decision is often based on the investing time horizon under consideration.


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BREAKING DOWN 'Horizontal Analysis'

For example, when you hear someone saying that revenues increased by 10% this past quarter, that person is using horizontal analysis. Horizontal analysis can be used on any item in a company's financials (from revenues to earnings per share), and is useful when comparing the performance of various companies.

  1. Revenue

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  2. Balance Sheet

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  3. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding ...
  4. Net Income - NI

    1. A company's total earnings (or profit). Net income is calculated ...
  5. Income Statement

    A financial statement that measures a company's financial performance ...
  6. Fundamental Analysis

    A method of evaluating a security that entails attempting to ...
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