Question

How would you do a horizontal analysis, vertical analysis and ratio analysis for Apple? Can someone an example of this?

Answer 1

Horizontal analysis helps us to find the growth trends of a company over the period. Whereas vertical analysis shows different items of income statement in relation to revenue and in case of balance sheet in relation to total assets or liabilities. Following is an example of vertical analysis , horizontal analysis of income statement :-

Particulars	2013	2014	2015	2016
Revenue	170910	182795	233715	215639
Gross profit	64304	70537	93626	84263
EBITDA	57048	61813	84505	73333
Horizontal analysis :-
Revenue		7% [{(182795-170910)/170910}x100]	27.9% [{(233715-182795)/182795}x100]	(7.7%) [{(215639-233715)/233715}x100]
Gross profit		9.7% [{(70537-64304)/64304}x100]	32.7% [{(93626-70537)/70537}x100]	(10%) [{(84263-93626)/93626}x100]
EBITDA		8.4% [{(61813-57048)/57048}x100]	36.7% [{(84505-61813)/61813}x100]	(13.2%) [{(73333-84505)/84505}x100]
Vertical analysis :
Revenue	100% {(170910/170910)x100}	100% {(182795/182795)x100}	100% {(233715/233715)x100}	100% {(215639/215639x100}
Gross profit	37.6% {(64304/170910)x100}	38.6% {(70537/182795)x100}	40.1% {(93626/233715)x100}	39.1% {(84263/215639x100}
EBITDA	33.5% {(57048/170910x100}	33.8% {(61813/182795)x100}	36.2% {(84505/233715)x100}	34% {(73333/215639)x100}
Ratio analysis :
Gross profit ratio	37.6% {(64304/170910)x100}	38.6% {(70537/182795)x100}	40.1% {(93626/233715)x100}	39.1% {(84263/215639)x100}

This is how we can do horizontal, vertical and ratio analysis. Complete analysis can be viewsviewed in various on either apple site or other sites engaged in stock research