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What Does Vertical Analysis Mean?

April 26, 2017analysis dictionary Education glossary Investing Investment mean tutorials vertical

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What Does Vertical Analysis Mean?

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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 represented as a proportion of the total account. The main advantages of analyzing a balance sheet in this manner is that the balance sheets of businesses of all sizes can easily be compared. It also makes it easy to see relative annual changes in one business.