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## What is a trended P&L?

Trended Profit & Loss (P&L) reports are considered important management tools and are often used by CFOs and analysts to track year-over-year revenue, expense and profit trends. The typical users of this type of visual financial report are: CFOs, Analysts and Executives.

What is a trended income statement?

Key Takeaway. Trend analysis provides a means to analyze company data over a period of time by focusing on the change in specific line items within the income statement and balance sheet. Changes are typically measured in dollars and percentages.

What is a trended balance sheet?

Trended Balance Sheets are considered key month-end reports in many companies and are often used by the finance team to analyze monthly trends in assets, liabilities and equity. Key functionality in this type of report dynamically lists months in the columns, starting with January and going to the current period.

### How do you analyze a company’s profit and loss account?

Analyzing a P&L Statement

1. Sales. This may seem obvious, but you should review your sales first since increased sales is generally the best way to improve profitability.
2. Sources of Income or Sales.
3. Seasonality.
4. Cost of Goods Sold.
5. Net Income.
6. Net Income as a Percentage of Sales (also known a profit margin)

How do you calculate trend analysis?

To calculate the trend percentage for 2018, you have to divide \$40,000 by \$30,000 to get 1.33, and then multiply it by 100. The result, which is 133%, is your trend percentage for 2018. If the trend percentage is greater than 100%, it means the balance in that year has increased over the base period.

How do you calculate vertical analysis?

Vertical analysis formula = (Statement line item / Total base figure) X 100. Horizontal analysis formula = {(Comparison year amount – Base year amount) / Base year amount} X 100.

#### What is difference between horizontal and vertical analysis?

The primary difference between vertical analysis and horizontal analysis is that vertical analysis is focused on the relationships between the numbers in a single reporting period, or one moment in time. On the other hand, horizontal analysis looks at amounts from the financial statements over a horizon of many years.

What is the other name of common size statement?

Common size statement is a form of analysis and interpretation of the financial statement. It is also known as vertical analysis. This method analyses financial statements by taking into consideration each of the line items as a percentage of the base amount for that particular accounting period.

How is Trend ratio calculated?

## What is a good P&L percentage?

What is a good profit margin? You may be asking yourself, “what is a good profit margin?” A good margin will vary considerably by industry, but as a general rule of thumb, a 10% net profit margin is considered average, a 20% margin is considered high (or “good”), and a 5% margin is low.

How do you prepare a P&L statement?

To create a basic P&L manually, take the following steps:

1. Gather necessary information about revenue and expenses (as noted above).
2. List your sales.
3. List your COGS.
4. Subtract COGS (Step 3) from gross revenue (Step 2).
5. List your expenses.
6. Subtract the expenses (Step 5) from your gross profit (Step 4).