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 8/20/2013 10:16:58 AM
0 Answers/Comments
Get an answer
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 isolation. [ Ratios used for performance evaluation should always be compared to some benchmark, such as comparatively to gauge past preformance; but most importantly to either an *industry average* or perhaps the identical ratio for the industry leader. ] (More)
Question
Expert Answered
Asked 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 8/20/2013 10:04:55 AM
0 Answers/Comments
17,426,746 questions answered
Popular Conversations
All of the following physical reactions occur when our ...
Weegy: What are your choices? User: A. dilating pupils B. increasing heartbeat C. increasing digestion D. increasing ...
9/17/2014 12:53:07 AM| 5 Answers
Which of the following areas would most likely have the deepest layer ...
Weegy: Which of the following areas would most likely have the deepest layer of topsoil? b. beach User: Which layer ...
9/17/2014 1:00:32 AM| 4 Answers
Simplify the expression where possible. (4c^2)^3 User: Simplify the ...
Weegy: -4x^4 User: Simplify the expression where possible. (x^2)^4 Weegy: that's not possible! what do you need to ...
9/18/2014 9:32:07 AM| 4 Answers
Simplify the expression where possible. (6^3)^-3 User: Simplify the ...
Weegy: (2^3) - 2 = 8 - 2 = 6 ; So the answer is 6. User: Evaluate the following expression. (5x)^0 User: ...
9/18/2014 9:35:27 AM| 4 Answers
Is the underlined word a predicate nominative or a predicate ...
Weegy: "The workers remained calm during the fire drill." In this sentence the word "calm" is the predicate adjective. ...
9/17/2014 2:01:58 PM| 3 Answers
Which word in the sentence is an indirect object? Send them ...
Weegy: D. apartment is an indirect object. User: Which word in the sentence is an indirect object? Choose all ...
9/18/2014 1:00:56 PM| 3 Answers
. Command is: A. Assumed by the individual who is the highest ranking ...
Weegy: Command is Directing, ordering, or controlling by virtue of explicit statutory, regulatory, or delegated ...
9/17/2014 1:35:53 AM| 2 Answers
When communicating, ICS requires the use of
Weegy: The Incident Command System (ICS) is "a systematic tool used for the command, control, and coordination of ...
9/17/2014 1:36:41 AM| 2 Answers
7. Before applying the corkscrew, Lucas discovers a bit of mold on ...
Weegy: Before applying the corkscrew, Lucas discovers a bit of mold on the cork of a bottle of Pinot Noir. Lucas should ...
9/17/2014 2:54:10 AM| 2 Answers
What court case upheld the use of implied powers by Congress in any ...
Weegy: The implied powers doctrine, upheld in McCulloch v. Maryland, gives Congress the power to create a national bank ...
9/17/2014 2:06:27 PM| 2 Answers
Weegy Stuff
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
P
C
L
Points 1992 [Total 26391]| Ratings 4| Comments 1952| Invitations 0|Offline
S
L
1
L
P
C
1
Points 1801 [Total 8332]| Ratings 8| Comments 1721| Invitations 0|Offline
S
L
1
1
1
1
L
1
L
Points 1431 [Total 11211]| Ratings 0| Comments 1431| Invitations 0|Offline
S
L
C
P
C
1
L
L
P
C
1
Points 1355 [Total 17294]| Ratings 10| Comments 1255| Invitations 0|Offline
S
L
P
C
L
P
C
P
C
L
P
C
P
C
P
C
Points 1335 [Total 18507]| Ratings 3| Comments 1305| Invitations 0|Online
S
1
L
1
L
P
P
L
Points 542 [Total 11788]| Ratings 0| Comments 542| Invitations 0|Offline
S
L
P
C
P
C
1
L
P
C
L
P
C
P
C
P
C
P
C
Points 503 [Total 19034]| Ratings 0| Comments 503| Invitations 0|Offline
S
L
Points 449 [Total 1119]| Ratings 0| Comments 449| Invitations 0|Offline
S
1
L
L
Points 401 [Total 5525]| Ratings 4| Comments 361| Invitations 0|Online
S
P
C
L
P
L
1
Points 45 [Total 6102]| Ratings 1| Comments 35| Invitations 0|Offline
Home | Contact | Blog | About | Terms | Privacy | Social | ©2014 Purple Inc.