Phoenix Week7: Ratio, Vertical, and Horizontal analysis

Mar 30th, 2015
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University of Phoenix
Course: Business and Management
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The three tools of financial statement analysis are the horizontal analysis, vertical analysis, and ratio analysis. These three tools help to evaluate the financial condition of a business. The horizontal analysis, or trend analysis, evaluates a series of financial data over a period of time

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?Phoenix Week 7-Ratio, Vertical, and Horizontal analysis The three tools of financial statement analysis are the horizontal analysis, vertical analysis, and ratio analysis. These three tools help to evaluate the financial condition of a business. The horizontal analysis, or trend analysis, evaluates a series of financial data over a period of time. It is primarily used in intercompany comparisons, with the purpose of determining increases or decreases in specific items over a time period of 2 or more years. These changes can be expressed either as an amount, or a percentage. The vertical analysis, or common-size analysis, expresses each item in the financial statement, as a percentage of a base amount. Vertical analysis can show percentage changes individual assets, liabilities and stockholders equity. A benefit of the vertical analysis is being able to make comparisons of companies o

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