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Vertical analysis is a tool to evaluate individual financial statement items or a group of items...

Vertical analysis is a tool to evaluate individual financial statement items or a group of items in terms of a specific base amount. When analyzing income statement accounts, the base is usually (revenue/expenses/net income) ____________ and for balance sheet accounts, the base is usually total (assets/liabilities/equity) ___________________ .

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Answer #1

Vertical analysis is a analysis of financial statements of single year are reviewed and analysed with proper technique. Revenue is basically the income produced by business operation.

Assets are resources with economic value owned by organization which provide future benefit.

* Vertical analysis is a tool to evaluate individual financial statement items or group of item in terms of a specific base amount. When analyzing income statement account, the base is usually Revenue and for balance sheet accounts the base is usually Total Assets.

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