Financial Accounting Analysis term projuct Paper

Financial Accounting Analysis projuct - Term Paper Example The findings are presented in a tabular format supported by comprehensive discussion of results. The horizontal analysis of Balance Sheet does not show any worrying trends or majorly fluctuating balances from 2011 to 2012. Inventories remain at the same level and while there is 12.84% increase in Property and Equipment it is offset by the 16.78% decrease in the Cash and Cash equivalents. Other large changes include an increase in Goodwill, decrease in Long term loan which is offset by an increase in the current portion of the Long term loan. The horizontal analysis of the balance sheet is set out below: The horizontal analysis of the Income Statement also does not show any worrying trends from 2011 to 2012. The Sales have increased by 1.8% but that is due to a corresponding increase in the Cost of Sales which has increased by 2.14%. The net earnings have increased by 3.3%, this is due to the fact that other income has increased and the financial costs have decreased during the period. The horizontal analysis of the income statement is set out below: The vertical analysis of the income statement for the years 2011 and 2012 set out below shows all balances as a percentage of sales. As illustrated the cost of sales and other expenses have both increased as a percentage of sales, even though minutely. This is worrying because ordinarily the cost of sale should be kept in line with sales. Conversely the net income is 2.09% of sales in 2012 and 2.03% in 2011. There is a slight increase, which all in all is a positive sign for the entity (Rajasekaran, 2011). Looking at the trends in the past five years’ financial statements of the company, it can be seen that the net sales have been increasing steadily for the past four years. The increase in sales for this year has been less than those compared to previous years, 1.6% from over 3%. The cost of