## About Horizontal Analysis Calculator (Formula)

The Horizontal Analysis Calculator is a tool used to analyze and compare financial statements over multiple periods. This calculator helps identify trends, changes, and growth rates in financial data, allowing for meaningful comparisons and insights.

The formula for calculating horizontal analysis depends on the specific financial data being analyzed. The most common formula compares the change or percentage change between two periods and can be expressed as:

**Horizontal Analysis = (Current Period Amount – Base Period Amount) / Base Period Amount**

Where: Horizontal Analysis = Change or percentage change between periods Current Period Amount = Financial data amount in the current period Base Period Amount = Financial data amount in the base or reference period

To use this formula, you need to know the financial data amounts for both the current period and the base period. Subtract the base period amount from the current period amount and divide by the base period amount. This will provide the change or percentage change between the periods.

It’s important to note that horizontal analysis can be conducted for various financial statement items, such as revenues, expenses, assets, or liabilities. By comparing financial data across periods, it helps identify patterns, variations, and potential areas of concern or improvement.

When using the Horizontal Analysis Calculator, ensure accurate input of the financial data amounts for the current and base periods to obtain reliable results. Additionally, consider any specific adjustments or considerations needed for different financial statement items or industry-specific analyses.

By applying the horizontal analysis formula correctly, you can analyze and compare financial statements, identify trends and changes, and gain insights into the financial performance and stability of a business or organization over time.