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A vertical analysis shows each line of financial statements as a percentage of a base line item so that comparisons can be made. This free Excel calculator produces a vertical analysis of an income statement in relation to total revenue, and of a balance sheet in relation to total assets.
Vertical analysis definition: A technique of analyzing financial statements by restating each line item (e.g. sales and marketing expenses) as a percentage of another base line item (e.g. Revenue). The horizontal analysis reports are not required by Accounting Standards, and are used more as a management tool rather than a formal reporting document.
The common size income statement shows each line of a standard income statement as a percentage of the total revenue (sales) of a business.
This free Excel calculator produces a common size income statement from standard information taken from the income statement of a business.
A common size income statement is one that has an additional column showing each monetary amount as a percentage of the total revenue of the business. The common size income statement is not required by Accounting Standards, and is used more as a management tool rather than a formal reporting document.
A common size balance sheet is one that has an additional column showing each monetary amount as a percentage of the total assets of the business. The common size balance sheet is not required by Accounting Standards, and is used more as a management tool rather than a formal reporting document.