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Vertical Analysis
10
What's Due this week....
A Chapter and Questions (of course)
Vertical Analysis Working Document
Vertical Analysis Discussion Board Topic
Vertical Analysis of Balance Sheet Data
Comparison of Two Companies..Use Total Assets as 100% Calculation
Vertical Analysis of an Income Staement
Comparison of two companies...
What Analysis can you make.....Let's look at our two companies...
Review of some Financial Statement Terms
What analysis can we make....let's look at our companies.....
For this week you will want to use terms from the Horizontal Analysis Prezi and this Prezi, along with whatever sources you find....
Balance Sheet Terms
Income Statement Terms
Asset - Any item that is used or owned by the individual, business or corporation. Assets usually are listed on the balance sheet statement in terms of liquidity (easily converted to cash) Example: Life Insurance Cash Value
Current Asset - Can easily be converted into cash during the accounting year. Example: Accounts Receivable
Intangible Asset -
Current Liability - obligations that the firm expects to pay off during the current accounting cycle. Example: Accounts payable
Long Term Liability - The amount the company owes but does not expect to pay during the current accounting year. Example: Mortgages on buildings
Owners Equity - The net worth of a company. Example: Tom Jones owner is OE = TA - TL
Net Sales - Gross sales less returns and allowances
Cost of Goods Sold - The amount it costs us to obtain the items that we sell. COGS typically includes the cost of materials, direct labor, and overhead allocated specifically to the product.
Gross Margin - (Gross profit) determined by subtracting COGS from net sales.
Operating Expenses - Fixed costs of a business, salaries, rental expenses, insurance, advertising expenses, and depreciation. These expenses are known in advanced.
Net Income - The profit after income taxes and interest expense in a C-Corp (Note in all other legal forms of business net income is classified as profit after interest expense)
Net Loss - The loss after income taxes and expense
What is a Vertical Analysis
The process of using a single variable on a financial statement as a constant and determining how all other variables relate as a percentage of a single variable.
Compare Two Different Companies Data.....