Week 4 DQ3

Two popular methods of financial statement analysis are horizontal analysis and vertical analysis. What are the differences between these two methods?

The difference is the type of analysis that they are doing. With horizontal analysis they are looking at data over a longer period of time and it is done for intracompany comparisons while the vertical analysis is done for both intracompany and intercompany analysis. Vertical analysis does not analyze over as long of aperiod of time but rather analyzes the individual items contained on the financial statement for which it is analyzing. The main difference is the way they analyze the data. While one does long term over a period of years and one does individual financial statements, they both analyze the financial data of...