Step 3: Horizontal and Vertical Analysis

Obtain the financial statements for the past four fiscal years for the company you selected using the 10-K report or the Annual reports from the company website. Prepare Condensed Financial Statements, meaning that some accounts are grouped into one summarized subtotal, but no numbers are left out. The condensed financial statements should total properly. For the balance sheet you might include: Current Assets, PPE, Other assets and Total assetsCurrent Liabilities, Long term liabilities, Paid in Capital, Retained Earnings and Other Stockholders equity. For the income statement your condensed statement could include Revenue, COGS, Gross Profit, Operating expenses, Income from operations, Other revenues and expenses, Income tax, Income from continuing operations, Non recurring items and Net Income.

Using your condensed Income statement: From your 4 years of data, prepare 3 years of trend comparisons (Horizontal analysis) (i.e. compare 2007 to 2008, 2008 to 2009 and 2009 to 2010) and 3 years of common size statements (vertical analysis) for each utilizing the most recent 3 years. This analysis should be prepared in Excel.

Using your condensed Balance Sheet: Prepare a trend analysis (horizontal analysis) and common size statements (vertical analysis) for each of the 4 years of financial data. This analysis should be prepared in Excel.

Prepare a well written-one page-typed paper detailing only significant items noted in the horizontal and vertical analyses with explanations of why the changes occurred based on your knowledge of the company. Dont ask me questions; tell me what is going on.

Appendix: In hard copy format, turn in all financial statements utilized to prepare the above analysis. Please do NOT include a link to the site for the financials.

Please submit all Excel information in ONE workbook with the tabs labeled.

***I'm aware this is a long assignment, if it can't be done please let me know. I am looking for an example of how this should be done. The business selected was TESLA. Thank you! This is for managerial accounting.