Vertical vs Horizontal Analysis: The Ultimate Guide!
It can be hard to compare the balance sheet of a $1 billion company with that of a $100 billion company. The common-sized accounts of vertical analysis make it possible to compare and contrast numbers of far different magnitudes in a meaningful way. First, we can see that the company’s marketing expenses increased not just in dollar terms, but also as a percentage of sales. This implies that the new money invested in marketing was not as effective in...