MGAB02H3 Chapter Notes - Chapter 14: Profit Margin

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10 Jan 2011
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N when a change is made, it is classified as either voluntary or mandatory. Intracompany basis: this basis compares an item or financial relationship inside a company within the current year or with one or more prior years. Comparisons within a company are often useful to detect changes in financial relationships and significant trends. Intercompany basis: this basis compares an item or financial relationship of one company with the same item or relationship in one or more competing companies. Comparisons with other companies give insight into a company"s competitive position. Industry averages: this basis compares an item or financial relationship of a company. Comparisons with industry give information about a company"s relative position within the industry. www. notesolution. com. Horizontal analysis is used in intracompany comparisons: vertical analysis: this tool evaluates financial statement data by expressing each item in financial statement as percentage of base amount for the same period of time.