ipl-logo

Vertical Balance Sheet

616 Words3 Pages

VERTICAL ANALYSIS INCOME STATEMENT Vertical analysis is used to display the relative size of different accounts on the financial statements. For example, when the income statement is analyzed vertically, it will show that the number of top line sales is 100% and each other account will show the percentage of total sales similarly In the balance sheet, the total assets of the company are 100%, and all other items in the balance sheet represent the percentage of total assets. First, we can see that the company's sales and admin expenses increased not just in dollar terms, but also as a percentage of sales. This means that the new funds for investment management are different from those of previous years in promoting revenue growth. Vertical analysis …show more content…

When you conduct vertical analysis, you analyze each line on a financial statement as a percentage of another line. On a balance sheet you would typically state each line as a percentage of total assets. When you compare these percentages to the previous year's figures, you can see trends and more clearly understand your company's financial direction. This comparison helps identify problems that can identify potential causes and take corrective action. The balance sheet clearly shows the current assets were in a far better proportion in 2014 and faced a major decline in 2015 and in 2016 we can see a slight rise in the current assets but still very low as compared to 2014 which depicts The company's working capital status and its ability to meet its short-term obligations was much better in 2014.We can also see there were no short term investments in the previous two years also the owners’ equity declined within the last year which shows either there is an owner overdue or your profitability is declining. Also there was a massive increase in the current liabilities in 2015 and lead to a further minor increase in 2016 which means company became more liable to pay off. There were no pension and other benefits in the previous two years. The stock holders’ equity increased to a good percentage in 2015 but also faced a minor decline but we can say it was almost similar to that of 2015. We can say the equity improved a good percentage from 2014 because of Increase in the company's earnings or capital so the overall result leads to increase in the company's shareholders equity balance. If we present a quick analysis viewing the balance sheet there was a decline in few accounts or 2016 may be a little hard in a few departments for Haier but the total liabilities decreased and the owners’ equity increased

Show More
Related

Est1 Task 3

864 Words | 4 Pages

Accounting ratios offer insight into business performance. The financial stability of a company can be tested to see how a company is performing using financial ratios. I have three sets of accounts, it is my objective to calculate the ratios, and interpret them to show the overall performance levels of all three companies. Liquidity ratio evaluates the company’s ability to pay off any current liabilities as well as long-term liabilities. These ratios display the cash levels and the ability to turn assets into cash to pay off liabilities and other current obligations.

Read More

Mountainarious Sporting Financial Analysis

1387 Words | 6 Pages

Here we are making a business report which evaluates the performance of Mountainarious Sporting Co. to take loan from Canadian Commercial Bank. With the given basic financial reports by the company we have used few methods of analysis which includes horizontal, vertical and trend analysis as well as ratios such as Debt, Current, Acid Test and Asset Turnover ratios. We also used other ratios such as Return of Total Assets, Return on Equity , net profit margin and so forth. All the calculations of the above are found in the appendices. Horizontal and vertical analysis The Financial Statement analyses how sales are increasing and whether the sales are reasonable for the

Read More

Next Plc Executive Summary

544 Words | 3 Pages

A slightly low return on assets than the previous year shows that the profitability of the assets of the company falls down a little. Shareholders consider financial statements to make decisions regarding buying and selling their shares. They are also concerned about the maximization of their wealth. They take into account the profitability by showing interest in return on sales or net profit margins.

Read More

Verizon Cash Flow Statement

627 Words | 3 Pages

For example, Verizon has increasing number of common stock. It was $424,000. Also, retained earning increased about 27%. Cash flow Statement Net cash provided by operating activities during 2014 decreased by $8.2 billion because increase in adjustment to net income like increase in income tax payments and interest payments.

Read More

Calaveras Vineyard Case Study Solution

1061 Words | 5 Pages

The total value of the firm has been calculated with the help of PV of cash flows and the continuing value and it shows an amount of

Read More

Home Depot Swot Analysis

1528 Words | 7 Pages

numbers show solid margins and improving sales, which gives them a solid and growing foothold in the industry. “Analytical procedures consist of ‘evaluations of financial information through analysis of plausible relationships among both financial and non-financial data’ (ISA/HKSA 520(4)).” In simple terms, the analytical procedures is not only used to understand the financial data but for flagging and researching any inconsistences with-in the financials and/or the business unity. These procedures are planned and carried out close to the end of the audit; and in turn helps the auditor to come to a general conclusion about the financials. 3.

Read More

2009 Year-End Financial Results Of Harley Davidson 2009

490 Words | 2 Pages

The debt to equity ratio is lower in 2009 compared to 2008. This is because the company borrowed less from financial firms in 2009, compared to 2008. Although the funds acquired from debts help in operations and expansion, such as increasing the total purchases made, they increase the amount the company loses in form of interests to financial institutions. Due to the company’s decision to reduce the rate of borrowings made, the current result is that the company will experience a reduction in its total purchases and sales. However, there is an anticipated benefit in the future, since the company will lose less in form of

Read More

Financial Analysis: Dyson Electrical Spares Ltd.

2160 Words | 9 Pages

It is used to identify if any expense (e.g. costs of goods sold) is too high when compared to sales. Horizontal analysis compares account balances and ratios over time periods, such as a company’s sales in 2012 to its sales in 2013. Dyson

Read More

Eni Financial Analysis Essay

583 Words | 3 Pages

These number combined with the increase of inventory amounts (2002=3,355, 2003=3,200)and the (4.6% decrease)operating cash flow shows that because of the year's decrease in inventory and lack of sales the amount for operating cash flow has decreased from 11,091 to 10,827 in 2003. This could show that the company isn't managing their inventory well or they reduced the cost of their products they are selling so the amount from the previous years sales isn't equal or greater than the current year's sales for 2003. The long-term debt as well as the total liabilities need to decrease (LTD=6,550, TL=37,457). The total assets Eni has accumulated are growing which is great but there is a slight decrease from 2002 when they were, 69,000 and decreased to 65,808. This is why action needs to be taken before it decreases any

Read More

Horizontal Analysis Ratio

1473 Words | 6 Pages

Horizontal analysis focuses on trends and changes in financial statement items over time. Along with the dollar amounts presented in the financial statements, horizontal analysis can help a financial statement user to see relative changes over time and identify positive or perhaps troubling trends. Base year for this analysis is taken as 2011. The table shows that the sales revenue and cost of goods sold increased over the years. And so did the gross profit of the company.

Read More

Walmart Financial Statement

487 Words | 2 Pages

Accrued Income Taxes also increased based on a rough estimate of the past year’s figures to $1,021,000. Current Liabilities increased to $66,619,000 and Retained Earnings decreased to $85,163,000. Accumulated Other Comprehensive Income (Loss) decreased to $10,739,000 and Total Liabilities and Equity equal $199,581,000 (Annual Report 2016

Read More

Nike Financial Ratios

1003 Words | 5 Pages

The Debt to equity ratio for November 15, 2015 was

Read More

The Fortune 500 Company: Micron Technology

1318 Words | 6 Pages

This increase is good for the company because assets may have future economic value. For the total liabilities, the percentage increase was only by 46%. This is a huge increase, meaning the company owes creditors for a past transaction. The last item is owner’s equity, which can be referred to as the book value of the company. The equity percentage increase is 21%.

Read More

Board Of Directors Of Nonprofit Organizations

507 Words | 3 Pages

According to Lesson 2 (2016), the chart of accounts refers to a list of different accounts which records the financial transactions of an organization, it facilities reporting by grouping like items together. Moreover, the chart of accounts helps organizations keep accurate records of their business transactions by organizing information. According to Cooper and Pattanayak (2011), the chart of accounts is crucial to organizational budget management; when there are mistakes associated with the chart of accounts it can have lasting effects on the organizations financial information, which is often used to make critical decisions. There are five main categories (assets, liabilities, equities, revenues, and expenses) in the chart of accounts and they are arranged based on the type of transactions. Assets refer to things the organization owns, liabilities are things the organization owes, whereas equity refers the overall growth of the organization.

Read More

Vertical Analysis Of Financial Accounting

1022 Words | 5 Pages

(a) Analysis of financial statements is considered to be an effective tool for analyzing the operating and financial performance of an organization. The analysis of financial statements is useful for taking practical economic decisions by various users. There are different types of tools available for the analysis of the performance of an organization. However, the horizontal and vertical analysis is a very widely used technique for developing a better understanding of financial strengths and weakness of an organization. For the purpose of this assignment, as a Financial Analyst for Middle East Venture Capital LLC, I have chosen Oman Fisheries Co. S.A.O.G.

Read More

More about Vertical Balance Sheet

Open Document