Question and answer
Two popular methods of financial statement analysis are horizontal analysis and vertical analysis. What are the differences between these two methods?
Under horizontal analysis an analyst compares the financial statement of the company for two more accounting periods, [ it can be used on any item in the financial statement company so if company wants to see whether its sales for current year is good or not it will compare the sales for the year 2010 with sales for year 2009 or for previous years. It is a time series analysis in the sense that
it shows comparison of financial data for several years against a chosen base year. It is also called dynamic analysis of the financial statements. Vertical analysis is done to review and analysis the financial statements for a year only and therefore it is also called static analysis. Under this method each entry for assets, liabilities and equities in a balance sheet is represented as a percentage of the total account. So if in asset side of balance sheet cash is $200, building is $400 and machinery is $600 and total of balance sheet is $1000, then cash will be 20 percent of total of balance sheet building will be 40 percent and machinery will be 60 percent. ]
Expert answered|selymi|Points 11139|
Question
Asked 346 days ago|8/20/2013 10:16:58 AM
0 Answers/Comments
Get an answer
Ask Weegy or search for an answer now. (Free)
New answers
Rating

There are no new answers.

Comments

There are no comments.

Add an answer or comment
Log in or sign up first.
Questions asked by the same visitor
What are some common ratios used to analyze financial information?
Weegy: There are different types of financial ratios used to analyze financial performance: profitability ratios, liquidity ratios, activity ratios, [ leverage ratios and market ratios. Check out the links for additional details: ] User: What are some common ratios used to analyze financial information? Which are the most important? Weegy: No one ratio is more important than another. Individual ratios should not be interpreted in ... (More)
Question
Expert Answered
Asked 346 days ago|8/20/2013 8:49:47 AM
0 Answers/Comments
What are some examples of how ratios are used in the decision-making process?
Weegy: Ratios used in management accounting illustrate the relationship between financial statements. The usefulness of a ratio depends on what aspects of the company’s business affairs are being investigated. [ Financial ratios should be used correctly for it to be effective; when it comes to comparing the company’s financial ratio it must be compared with identical basis. ] (More)
Question
Expert Answered
Asked 346 days ago|8/20/2013 10:04:55 AM
0 Answers/Comments
16,978,177 questions answered
Popular Conversations
Is the fattest organ in the body
Weegy: I think you are not fat. Having a balanced meal can make your body stay slim and healthy. User: ______ is ...
8/1/2014 9:29:21 AM| 2 Answers
The poverty threshold, or poverty line, varies according to ...
Weegy: The poverty threshold, or poverty line, varies according to B)nationwide income averages. Poverty line, or ...
8/1/2014 10:24:03 AM| 2 Answers
Is brain damage heredity
Weegy: There are two types of brain damage: Traumatic brain injury and Acquired Brain Injury. Both are not hereditary. ...
8/1/2014 10:52:27 AM| 2 Answers
Where should you add a semicolon in this sentence? We enjoyed the ...
Weegy: We enjoyed the play we plan to see more plays in March, April, and May. Add a semicolon after play. User: ...
8/1/2014 6:33:53 PM| 2 Answers
3x + 5 = 7 - 12x
Weegy: 6x(2x^2-3x
8/1/2014 4:03:17 AM| 1 Answers
Weegy Stuff
S
L
C
P
C
1
L
L
Points 148 [Total 13764]| Ratings 0| Comments 148| Invitations 0|Online
S
L
1
Points 126 [Total 4102]| Ratings 0| Comments 126| Invitations 0|Offline
S
R
L
1
1
P
C
1
P
1
1
L
P
C
P
C
1
P
C
L
P
C
1
P
C
P
C
Points 110 [Total 21710]| Ratings 0| Comments 110| Invitations 0|Offline
S
L
1
1
1
1
L
1
Points 59 [Total 7766]| Ratings 0| Comments 59| Invitations 0|Offline
S
P
C
L
P
L
1
Points 44 [Total 5926]| Ratings 0| Comments 44| Invitations 0|Offline
S
1
L
Points 25 [Total 4589]| Ratings 0| Comments 25| Invitations 0|Offline
S
L
P
C
L
P
C
P
C
L
P
C
P
C
P
C
Points 21 [Total 15048]| Ratings 0| Comments 21| Invitations 0|Offline
S
Points 19 [Total 30]| Ratings 0| Comments 19| Invitations 0|Offline
S
R
R
L
R
R
Points 12 [Total 1233]| Ratings 0| Comments 12| Invitations 0|Offline
S
L
P
C
P
C
1
L
P
C
L
P
C
P
C
P
C
P
C
Points 12 [Total 17583]| Ratings 0| Comments 12| Invitations 0|Offline
Home | Contact | Blog | About | Terms | Privacy | Social | ©2014 Purple Inc.