- Horizontal and Vertical analysis are two common tools used for
assesing organizational performance.
- Vertical analysis looks at each and every lineitem as a
percentage of base figure with current period
- Horizontal analysis looks at the changes in dollar amounts in a
company perforomance
Benifits of Vertical analysis:
- Simple to learn and implement
- Helps in identifying where the company has invested
resources
- Helps in comparing numbers of company between different
periods
Benifits of Horizontal analysis
- It helps understand revenue expenses
and other lineitems
- It helps to spot trends growth patterns
- It is depicted as percentage growth over the same line item in
base year