Financial Analysis (Vertical and Horizontal Techniques) PDF
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Uploaded by StylishSugilite5751
University of Rizal System
2021
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Summary
This document is a presentation on financial analysis, specifically vertical and horizontal techniques. It outlines the objectives of the study, explains the methods, and offers a conclusion on the topic. The presentation appears to be prepared for university-level students.
Full Transcript
FINANCIAL ANALYSIS (THE VERTICAL AND HORIZONTAL TECHNIQUES) GROUP 1 Leader: Tocson, Justine Rose P. Members: Cantorna, Eliza Marie Prepotente, Darrel N. Tocson, Justine Rose P. Objectives To define and know the financial analysis and its...
FINANCIAL ANALYSIS (THE VERTICAL AND HORIZONTAL TECHNIQUES) GROUP 1 Leader: Tocson, Justine Rose P. Members: Cantorna, Eliza Marie Prepotente, Darrel N. Tocson, Justine Rose P. Objectives To define and know the financial analysis and its significance. Understand the concepts of horizontal and vertical analysis. To learn how to apply these financial analysis techniques. Financial Analysis The process of examining a company's performance in the context of its industry and economic environment in order to arrive at a decision or recommendation. Horizontal (Trend) Analysis An approach/technique used to analyze financial statements by comparing specific financial information for a certain accounting period with information from other periods. Horizontal Formula (Prior year - Current year / Prior year) X 100 Vertical (Common-size) Analysis A technique used in financial statement analysis to show the relative size of each account compared to the total amount. Vertical Formula (Comparison amount/Base amount) X 100 Difference of horizontal and vertical analysis Horizontal analysis can help you compare a company's current financial status to its past status, while vertical analysis can help you compare one company's financial status to another's. Conclusion The significance of financial analysis cannot be overstated. It provides a comprehensive understanding of a company's financial health, guiding informed decisions on investments, credit, and strategic planning. By utilizing essential skills and advanced tools, financial analysts play a crucial role in driving sustainable growth and ensuring the long- term success of organizations References Indeed Editorial Team. 2023. “Horizontal Analysis vs. Vertical Analysis: What’s the Difference?” Indeed Career Guide. March 10, 2023. https://www.indeed.com/career-advice/career-development/horizontal-analysis-vs-vertical- analysis Common-size Analysis (Vertical Analysis): Income Statement. 2022. “Common-Size Analysis (Vertical Analysis): Income Statement.” YouTube. September 3, 2022. https://youtu.be/cLCys6R2Mw0?si=eSy-KJ2wQSC2_L9o. Rate-of-Change Analysis (Horizontal Analysis): Income Statement. 2022. “Rate-of-Change Analysis (Horizontal Analysis): Income Statement.” YouTube. September 3, 2022. https://youtu.be/PekkiMeipkA?si=2a51Y3fXJNIVxJma. CFI Team. 2022. “Horizontal Analysis.” Corporate Finance Institute. 2022. https://corporatefinanceinstitute.com/resources/accounting/horizontal-analysis/. CFA institute. 2024. “Introduction to Financial Statement Analysis.” Www.cfainstitute.org. https://www.cfainstitute.org/en/membership/professional-development/refresher-readings/introduction-financial- statement-analysis#:~:text=Financial%20analysis%20is%20the%20process. Solutions, Vena. 2024. “What Is Vertical Analysis? | Vena.” Www.venasolutions.com. 2024. https://www.venasolutions.com/finance-glossary/vertical- analysis#:~:text=Vertical%20analysis%20is%20a%20technique.
