Horizontal Analysis

Horizontal analysis, also called “trend analysis,” examines changes in a company’s financial reports over time. Valuation Tutor lets you conduct horizontal analysis by letting you merge financial statements and visualize both trends and relative changes.  

For example, the following illustrates result of merging IBM’s income statement  over the last 5 years and plotting the components of Total Revenue:

Visualizing Financial Statements: Column or Pie Charts?

As you know, Valuation Tutor provides different ways to visualize financial statement related information.  Some of these are pie charts, some column charts.  The other day, I was asked if a pie chart could also be rendered as a column chart since the user found column charts to be more intuitive.  This got me thinking that perhaps I should explain how the different types of charts are intended to be used.   Consider the following two charts, both displaying the same data:

Accessing and Viewing Financial Reports

In the advanced version of Valuation Tutor, we have added quite a bit of capability to directly view and plot variables in a companies financial report.  For example, consider the following:

 

I am viewing the income statement in IBM’s 2011 10-K.  I can select what fields to plot.  Here, I am plotting total revenue, total expenses, net income before taxes, and net income.   The raw data is plotted, in this case for the three years reported in the statement.   The list of filings we cover is in the dropdown net to “Select Stock.”  You can search by ticker or by company name.  Our filing database includes interactive filings of major US companies, and you can look at 10-K’s, 10-Q’s, as well as 20-F’s.


These charts provide a quick way to visually look at a company over time.  For example, from IBM’s balance sheet, I can look at total assets and total liabilities over the two years reported, and stockholders equity:

You may have noticed the “Data Collector” tab above the chart. This lets you collect