BUSI 1003 Chapter Notes - Chapter 9: Internal Control, Asset, Current Liability
1 May 2014
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Document Summary
Companies financial statements are analyzed using a the following methods: horizontal analysis, vertical analysis, common-sized statements. Each item on the most recent statement is compared with the related item on one or more earlier statements in terms of the following: When comparing statements, the earlier statement is normally used as the base for computing increases and decreases. The percentage analysis of the relationship of each component in a financial statement to a total with a statement. The percentages for vertical analysis of a balance sheet are computed as follows: Each asset item is stated as a percent of total assets. Each liability and stockholders" equity item is stated as a percent of the total liabilities and stockholders" equity. In vertical analysis of an income statement, each item is stated as a percent of net sales. All items are expressed as percentages with no dollar amounts shown.
