Financial Statement Analysis

Horizontal Analysis
Vertical Analysis

Horizontal Analysis

The statements for two or more periods are

used in horizontal analysis.
The earliest period is usually used as the base
period and the items on the statements for all
later periods are compared with items on the
statements of the base period.

Formulas

Peso Change = amount of the item in comparison year Amount of the item in
base year

Percentage Change = (Peso Change / amount of base

year) * 100

Vertical Analysis

Common-Size Income Statements

Common-Size Balance Sheets

Required: Perform a Horizontal and

Vertical Analysis for XYZ Company