Oct 08, 2018 · The horizontal analysis is conducted on both balance sheet and profit/ loss account. Purpose of the horizontal analysis. Horizontal analysis is considered the most important the financial statement analysis and for the annual reports. Horizontal analysis is used for annual budget making process. Horizontal Analysis of the Balance Sheet. Horizontal analysis of the balance sheet is also usually in a two-year format, such as the one shown below, with a variance showing the difference between the two years for each line item. An alternative format is to add as many years as will fit on the page, without showing a variance, so that you can ... Aug 12, 2010 · Vertical analysis A method of financial statement analysis in which each entry for each of the three major categories of accounts (assets, liabilities and equities) in a balance sheet is ... Oct 08, 2018 · Vertical Analysis interpretation and formula is used for the analysis of Financial Statments and balances sheets. Usually done by the investor for checking the trend of business. Disclaimer Horizontal or trend analysis of financial statements Posted in: Financial statement analysis (explanations) Horizontal analysis (also known as trend analysis ) is a financial statement analysis technique that shows changes in the amounts of corresponding financial statement items over a period of time. What is Common Size Analysis? Common size analysis, also referred as vertical analysis, is a tool that financial managers use to analyze financial statements Three Financial Statements The three financial statements are the income statement, the balance sheet, and the statement of cash flows.