Horizontal and vertical analysis

[Abuzar Qazi]

Horizontal analysis is an analysis performed by calculating the ratios and comparing them with the previous years Like GP% in this year and the last year signifies the horizontal analysis Whereas vertical analysis is performed on the ratios calculated with respect to a particular head of account.Mostly we take sales in P&L and assets in Balance sheet for vertical analysis.cogs to sales , Admin exp to sales are an example of vertical analysis.

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