Explanation: stands for Year over Year and is a type of financial analysis. This guide will teach you to perform financial statement analysis of the income statement, that's useful when comparing time series data.

What is horizontal analysis and vertical analysis?

The primary difference between vertical analysis and horizontal analysis is that vertical analysis is focused on the relationships between the numbers in a single reporting period, or one moment in time. ... On the other hand, horizontal analysis looks at amounts from the financial statements over a horizon of many years.

What is an example of horizontal analysis?

Horizontal analysis compares account balances and ratios over different time periods. For example, you compare a company's sales in 2014 to its sales in 2015. ... The analysis computes the percentage change in each income statement account at the far right.