Horizontal Analysis IS

Horizontal analysis looks at amounts on the financial statements over the past years.
The horizontal analysis of Starbuck's Income Statement shows the increases and decreases
between 2011-2012 and 2012-2013, however, from the table there are more decreases and
some numbers are huge. First of all, the total revenue shows the decrease from 13.67% in the
years of 2011 and 2012 to 11.98% in the years of 2012 and 2013. Also, the decrease is on the
Cost of Revenue, in 2011 and 2012 it was 18.26% and in 2012-2013 it became 9.79%. However,
Gross Profit made increasing from 10.34% in the years of 2011 and 2012 to 13.67% in the 2012
and 2013, what shows that the company made succes during these years. Looking on the
Operating expenses, there are a huge decrease in the Operating Income from 15.56% in the
2011-2012 to (116.29)% in the years of 2012 and 2013, it happened because in 2012 and 2013
the Non-Recurring Items were very high. Another big amount of decrease happened in Income
tax from 19.77% during 2011 and 2012 to (135.39)% in 2012-2013. All this situation influenced
on Net Income's decrease for 88.31% ( from 11.09% to (99.40)%). Net income is one of the most
closely followed numbers in finance, so it's decreasing shows that company has some problems,
which they have to review.