Daily Archives: 5 August, 2021

Horizontal and vertical analysis Accounting and Accountability

Through horizontal analysis, we observe that Company A has experienced consistent revenue growth over the five-year period. The growth rates of 20%, 25%, 20%, and 11.11% indicate a positive trend in the company’s revenue generation. Variance analysis compares actual financial performance with the expected or budgeted performance. It is typical for an income statement to…

Mastering Investment Decisions: A Comprehensive Guide to Calculating the Payback Period

This is the idea that money is worth more today than the same amount in the future because of the earning potential of the present money. Let’s say Jimmy does buy the machine for $720,000 with net cash flow expected at $120,000 per year. The payback period calculation tells us it will take him 6…