An analysis of the profit and loss account (or balance sheet) in which each item is expressed as a percentage of the total. The vertical analysis provides evidence of structural changes in the business such as increased profitability through more efficient production.
The process of reducing all items in the balance sheet and income statement to a percentage of total assets or sales revenue, respectively.
The process of analyzing the financial statements (normally) with the purpose of understanding financial relationships and detecting anomalies.
A type of financial analysis that reveals the relationship of each financial statement item to a specified financial statement item during the same reporting period. Contrast with horizontal analysis.
A type of financial analysis involving income statements and balance sheets. All income statement amounts are divided by the amount of net sales so that the income statement figures will become percentages of net sales. All balance sheet amounts are divided by total assets so that the balance sheet figures will become percentages of total assets. To Top
Process of using a single variable on a financial statement as a constant and determining how all of the other variables relate as a percentage of the single variable.
The process of dividing each expense item in the income statement of a given year by net sales to identify expense items that rise faster or slower than a change in sales.
Dividing each expense item in the income statement of a given year by net sales to identify expense items that rise more quickly or more slowly than a change in sales.