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Vertical Balance Sheet

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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

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