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Two popular methods of financial statement analysis are horizontal analysis and vertical analysis. What are the differences between these two methods?
Weegy: Vertical analysis reports each amount on a financial statement as a percentage of another item. [ For example, the vertical analysis of the balance sheet means every amount on the balance sheet is restated to be a percentage of total assets. Horizontal analysis looks at amounts on the financial statements over the past years. For example, the amount of cash reported on the balance sheet at December 31 of 2006, 2005, 2004, 2003, and 2002 will be expressed as a percentage of the December 31, 2002 amount. Instead of dollar amounts you might see 134, 125, 110, 103, and 100 ] (More)
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Two popular methods of financial statement analysis are horizontal analysis and vertical analysis. What are the differences between these two methods?
Weegy: Financial statement information is used by both external and internal users, including investors, creditors, managers, and executives. [ These users must analyze the information in order to make business decisions, so understanding financial statements is of great importance. Several methods of performing financial statement analysis exist. This article discusses two of these methods: horizontal analysis and vertical analysis. ] (More)
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