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What is the difference between vertical analysis and horizontal analysis?

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Question added by Mujtaba Hussain , Accounts officer , Miraj Entertaiments
Date Posted: 2014/04/16
Abhishek Banerjee
by Abhishek Banerjee , Work Assistant , Andaman Lakshadweep Harbour Works

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 December31 of2012,2011,2010,2009, and2008 will be expressed as a percentage of the December31,2008 amount.

Muhammad Imran
by Muhammad Imran , Ast Finance & Accounts Manager , Mohmand Dada Minerals (Pvt) Limited

Vertical analysis reports each amount on a financial statement as a percentage of another item while Horizontal analysis looks at amounts on the financial statements over the past years.

Muhammad Hamid
by Muhammad Hamid , Manager Accounts and Taxation , Stancos Private Limited, Plastech Products Private Limited and Nature Sciences Private Limited

Vertical analysis analyse the current year's performance and horizontal analysis analyse past years performance.

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