[et_pb_section fb_built=”1″ admin_label=”section” _builder_version=”4.16″ global_colors_info=”{}” theme_builder_area=”post_content” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on” da_disable_devices=”off|off|off”][et_pb_row admin_label=”row” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||” theme_builder_area=”post_content”][et_pb_text _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n
You can carry out the analysis of financial statements using many methods. Two popular methods that cover different needs are horizontal and vertical analysis. Horizontal analysis studies change over time for a specific variable. Vertical analysis, on the other hand, focuses on a specific period of time and studies the proportions of the total amount represented by the different variables for that period.<\/p>\n
In this article, you will learn about the horizontal analysis of financial statements and how to incorporate it into your company\u2019s accounting practices. You will also learn how to do horizontal analysis using an income statement and a balance sheet.<\/p>\n
[\/et_pb_text][et_pb_text module_id=”what-is-a-horizontal-analysis” _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n
While vertical analysis<\/a> focuses on the relationships between different variables in your financial statements, horizontal analysis focuses on changes to specific variables over time by expressing the difference in their values as a percentage or an absolute value. That\u2019s exactly why it\u2019s called horizontal analysis \u2013 you compare the data from each period side by side to calculate your results.<\/p>\n You can do horizontal analysis using only two periods for the comparison, but it\u2019s highly recommended you use more to avoid drawing and acting on less accurate conclusions.<\/p>\n Horizontal analysis is often referred to as trend analysis<\/a>, but the latter term has broader applications and is not specific to financial statements. As the name suggests, trend analysis involves identifying trends and predicting outcomes<\/a>, which requires analyzing data from multiple consecutive periods.<\/p>\n [\/et_pb_text][et_pb_text module_id=”horizontal-analysis-formula” _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Select the base and comparison periods and the values for your chosen variable, then calculate the percentage change between them. Calculating this involves subtracting the base period\u2019s value from the comparison period\u2018s value, dividing the result by the base period\u2019s value, then multiplying by 100.<\/p>\n percentage change = ((comparison value – base value) \/ base value) * 100<\/p>\n<\/blockquote>\n Now that you know how to calculate percentage change, you can read about all the steps involved in horizontal analysis in the next section.<\/p>\n [\/et_pb_text][et_pb_text module_id=”how-to-perform-horizontal-analysis” _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n The horizontal analysis of financial statements is a relatively straightforward process. As you saw in the previous section, the calculations involved are simple. You can easily set up a template in a spreadsheet to speed up the process. Your focus should be on analysis and interpretation, including which variables and periods you choose. In the next section, I will apply these steps to two different examples: the first with an income statement and the second with a balance sheet.<\/p>\n First, decide which periods you will be comparing, carefully choosing comparable periods. For example, if your industry is seasonal, comparing consecutive quarters would provide misleading results. It would make more sense to compare the values for a specific quarter to the same quarter from past years. If you happen to choose a particularly bad time period for your base values, the values for your comparison period may look much better than they are.<\/p>\n The next step is to identify the data you need. Depending on the metrics you want to focus on, you will need different financial statements, like balance sheets, income statements<\/a>, or cash-flow statements.<\/p>\n Once you have your company\u2019s values for the variables of interest, you need to find those of similar companies in your industry for the selected time periods. Sometimes you may find horizontal analysis reports, saving you the calculations, but you can always calculate the percentage change yourself using publicly available financial data. Remember to choose companies with similar characteristics for useful comparisons.<\/p>\n It\u2019s possible to do horizontal analysis using absolute change values instead of the percentage change. However, expressing the change as a percentage tends to be more useful, as it allows you to easily compare to other companies and study proportional change. For each variable, calculate the percentage change using the formula:<\/p>\n percentage change = ((comparison value – base value) \/ base value) * 100<\/p>\n<\/blockquote>\n Now that you have the percentage change values for your chosen variables – both for your company and others in the same industry – it\u2019s time to analyze your company\u2019s values and those of your competitors. This will allow you to interpret these results within as comprehensive a context as possible.<\/p>\n In the next section, you have step-by-step instructions on how to do horizontal analysis with examples using a balance sheet and an income statement.<\/p>\n [\/et_pb_text][et_pb_text module_id=”horizontal-analysis-examples” _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Fortunately, tools like Google Sheets or Excel allow you to set up templates, so you can forget about the calculations and focus on analysis. With Sheetgo, an AI-powered data automation platform, you can also automate the data flows, so the figures land in your spreadsheet on their own and the results and reports reach the right users.<\/p>\n The two examples below show how to do horizontal analysis using Google Sheets, but you can easily do the same in Excel. The first example is based on a balance sheet, and the second is on an income statement.<\/p>\n You can download the income statement template<\/a> for free.<\/p>\n [\/et_pb_text][et_pb_text module_id=”horizontal-analysis-of-income-statements” _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n In this first example, I will be doing a horizontal analysis of Company A\u2019s revenue based on its annual income statement.<\/p>\n For this example, I will carry out the analysis of the data reported for 2021 and 2022. However, you can do this quickly for multiple years, particularly if you\u2019re interested in long-term trends.<\/p>\n I can find the data I want to analyze for 2021 and 2022 at the top of the income statement: \u2018Revenue\u2019.<\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/static.sheetgo.com\/wp-content\/uploads\/2026\/10\/horizontal-analysis-income-statement-revenue-data.webp” alt=”Horizontal analysis \u2014 income statement with 2021 and 2022 revenue lines and total net revenue” title_text=”Income statement with 2021 and 2022 revenue lines and total net revenue” align=”center” _builder_version=”4.22.2″ _module_preset=”default” width=”100%” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_image][et_pb_text _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Horizontal Analysis – Income Statement Revenue Data<\/p>\n Insert a column to the right of \u20182022\u2019 and click on the cell corresponding to the first revenue line item.<\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/static.sheetgo.com\/wp-content\/uploads\/2026\/10\/horizontal-analysis-income-statement-change-column.webp” alt=”Horizontal analysis \u2014 empty % Change column added next to the 2022 revenue column” title_text=”Empty % Change column added next to the 2022 revenue column” align=”center” _builder_version=”4.22.2″ _module_preset=”default” width=”100%” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_image][et_pb_text _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Horizontal Analysis – Income Statement Add Column<\/p>\n Type in the equal sign, then the % change formula using cell references.<\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/static.sheetgo.com\/wp-content\/uploads\/2026\/10\/horizontal-analysis-formula-income-statement.webp” alt=”Horizontal analysis formula \u2014 =((C3-B3)\/B3)*100 typed in the % Change cell for sales revenue” title_text=”=((C3-B3)\/B3)*100 typed in the % Change cell for sales revenue” align=”center” _builder_version=”4.22.2″ _module_preset=”default” width=”100%” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_image][et_pb_text _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Horizontal Analysis – Income Statement Add Formula<\/p>\n Drag down the cell with the formula to copy it to the other revenue line items, as well as the total net revenue.<\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/static.sheetgo.com\/wp-content\/uploads\/2026\/10\/horizontal-analysis-income-statement-results.webp” alt=”Horizontal analysis \u2014 % change for each revenue line, -4.40 for total net revenue” title_text=”% change for each revenue line, -4.40 for total net revenue” align=”center” _builder_version=”4.22.2″ _module_preset=”default” width=”100%” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_image][et_pb_text _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Horizontal Analysis – Income Statement Results<\/p>\n Now that I have performed the required calculations on Company A\u2019s data, I need to do the same for companies in the same industry that are similar to Company A. This will allow me to analyze and compare results in context, increasing the likelihood of an accurate interpretation.<\/p>\n The same percentage change formula also helps you find and analyze budget vs. actual variances<\/a>.<\/p>\n When you compare one year with the one before it, this is also how you calculate year-over-year growth<\/a>.<\/p>\n [\/et_pb_text][et_pb_text module_id=”horizontal-analysis-of-balance-sheets” _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n In this second example, I will do a horizontal analysis of Company B\u2019s current assets based on the annual balance sheets.<\/p>\n For this example, the analysis will be carried out on the data reported for 2021 and 2022. However, you can do this very quickly for multiple years, particularly if you\u2019re interested in long-term trends.<\/p>\n I can find the data I want to analyze for 2021 and 2022 at the top of the balance sheet: \u2018Current Assets\u2019.<\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/static.sheetgo.com\/wp-content\/uploads\/2026\/10\/horizontal-analysis-balance-sheet-current-assets.webp” alt=”Horizontal analysis of balance sheet \u2014 current assets for 2021 and 2022″ title_text=”Current assets for 2021 and 2022″ align=”center” _builder_version=”4.22.2″ _module_preset=”default” width=”100%” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_image][et_pb_text _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Horizontal Analysis – Balance Sheet Data<\/p>\n Insert a column to the right of \u20182022\u2019 and click on the cell corresponding to the first line item.<\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/static.sheetgo.com\/wp-content\/uploads\/2026\/10\/horizontal-analysis-balance-sheet-change-column.webp” alt=”Horizontal analysis of balance sheet \u2014 empty % Change column next to 2022 current assets” title_text=”Empty % Change column next to 2022 current assets” align=”center” _builder_version=”4.22.2″ _module_preset=”default” width=”100%” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_image][et_pb_text _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Horizontal Analysis – Balance Sheet Add Column<\/p>\n Type in the equal sign, then the % change formula using cell references.<\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/static.sheetgo.com\/wp-content\/uploads\/2026\/10\/horizontal-analysis-formula-balance-sheet.webp” alt=”Horizontal analysis formula \u2014 =((C4-B4)\/B4)*100 typed in the % Change cell for cash” title_text=”=((C4-B4)\/B4)*100 typed in the % Change cell for cash” align=”center” _builder_version=”4.22.2″ _module_preset=”default” width=”100%” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_image][et_pb_text _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Horizontal Analysis – Balance Sheet Add Formula<\/p>\n Drag down the cell with the formula to copy it to the other current assets line items.<\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/static.sheetgo.com\/wp-content\/uploads\/2026\/10\/horizontal-analysis-balance-sheet-results.webp” alt=”Horizontal analysis of balance sheet \u2014 % change for each current asset, 20.91 for the total” title_text=”% change for each current asset, 20.91 for the total” align=”center” _builder_version=”4.22.2″ _module_preset=”default” width=”100%” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_image][et_pb_text _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Horizontal Analysis – Balance Sheet Results<\/p>\n Now that I have performed the required calculations on Company B\u2019s data, I need to do the same for companies in the same industry that are similar to Company B. This will allow me to analyze and compare results in context, increasing the likelihood of an accurate interpretation.<\/p>\n [\/et_pb_text][et_pb_text module_id=”conclusion” _builder_version=”4.22.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Horizontal analysis can help you identify trends in your data using your financial statements. Using Excel or Google Sheets is a great way to carry out a horizontal analysis of financial statements, especially if you use a pre-made template<\/a>. If you use Sheetgo, an AI-powered data automation platform, you can even automate parts of this process, including the data flows, calculations, and sharing the results.<\/p>\n You now know how to do a horizontal analysis of data from your financial statements. You know how to do horizontal analysis using Excel and Google Sheets, using both an income statement and a balance sheet. Check out the following article for more finance-related how-to\u2019s: [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" A an\u00e1lise horizontal compara itens das demonstra\u00e7\u00f5es financeiras entre per\u00edodos. Aprenda a f\u00f3rmula e siga exemplos passo a passo com uma DRE e um balan\u00e7o patrimonial.<\/p>","protected":false},"author":2,"featured_media":265126,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[36],"tags":[],"class_list":["post-265117","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-processes"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.sheetgo.com\/pt\/wp-json\/wp\/v2\/posts\/265117","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sheetgo.com\/pt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sheetgo.com\/pt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sheetgo.com\/pt\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sheetgo.com\/pt\/wp-json\/wp\/v2\/comments?post=265117"}],"version-history":[{"count":0,"href":"https:\/\/www.sheetgo.com\/pt\/wp-json\/wp\/v2\/posts\/265117\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sheetgo.com\/pt\/wp-json\/wp\/v2\/media\/265126"}],"wp:attachment":[{"href":"https:\/\/www.sheetgo.com\/pt\/wp-json\/wp\/v2\/media?parent=265117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sheetgo.com\/pt\/wp-json\/wp\/v2\/categories?post=265117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sheetgo.com\/pt\/wp-json\/wp\/v2\/tags?post=265117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Horizontal analysis formula<\/h2>\n
\n
How to perform horizontal analysis?<\/h2>\n
1. Select time periods<\/h3>\n
2. Gather data<\/h3>\n
3. Calculate the percentage change<\/h3>\n
\n
4. Analyze & compare results<\/h3>\n
Horizontal analysis examples<\/h2>\n
Horizontal analysis of income statements<\/h2>\n
1. Select time periods<\/h3>\n
2. Gather data<\/h3>\n
3. Calculate percentage change<\/h3>\n
4. Analyze & compare results<\/h3>\n
Horizontal analysis of balance sheets<\/h2>\n
1. Select the time period<\/h3>\n
2. Gather data<\/h3>\n
3. Calculate % change<\/h3>\n
4. Analyze & compare results<\/h3>\n
Conclusion<\/h2>\n
<\/a><\/p>\n\n