Vertical Analysis Income Statement Template

Incomes expenses and taxes are represented as the proportion of the total sales.

Vertical analysis income statement template. Net sales is divided by itself making it 100. This income statement template is set up to reflect a two year period along with a vertical analysis of each year. Vertical analysis va just as horizontal analysis it is applied to the balance sheet or income statement. Thus just insert the respective amounts of the balance sheet in the light blue columns.

With this method of analysis of financial statements we will look up and down the income statement hence vertical analysis to see how every line item compares to revenue as a percentage. Unlike horizontal analysis which compares evolution between different years vertical analysis compares how much an. While performing income statement vertical analysis all the amount from all 3 major categories of accounts in an income statement viz. Vertical analysis formula for the income statement and balance sheet are given below vertical analysis formula income statement income statement item total sales 100 vertical analysis formula balance sheet balance sheet item total assets liabilities 100.

The template will automatically do the vertical analysis for you. For example in the income statement shown below we have the total dollar amounts and the percentages which make up the vertical analysis. The vertical analysis is based on net revenue the most common denominator used in a vertical analysis of the income statement. Vertical analysis for an income statement when performing a vertical analysis of an income statement net sales usually used as the basis for which all other items are compared.

Income statement vertical analysis means the vertical evaluation of an income statement and other financial statements in terms of the relative percentage change in line items. Vertical analysis refers to the analysis of the income statement where all the line item which are present in company s income statement are listed as a percentage of the sales within such statement and thus helps in analyzing the company s performance by highlighting that whether it is showing upward or downward trend.