what does the term vertical analysis mean? What is another name for this type of analysis?...

what does the term vertical analysis mean? What is another name for this type of analysis? How does it differ from horizontal analysis?

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Expert Solution

Vertical analysis is a proportional method of anasysis of financial statements, where each line item on a financial statement is listed as a percentage of another item. In this every line item of income statement will states as a percentage of gross sales of the any income statement and in the same manner in the balance sheet at assets side any line item will represent the his part of percetage against the 100 % of the total assets.

Ex. Sales is the 100% and all other line item will be in the percentage against the sales.

Another name of the Analysis is a Horzontal analysis in this cash data is analysis for the two period and last period of the data will take as base year ans take the 100 % and on the basis of this current year data will be calculated like 110% or 90% of the last year. In this method every line item of the base year is 100% and ther current year line item will be value of the current year in percentage.

ekkarill92 answered 1 year ago

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