Utk yg mo Bantu2 Keuangan saya..monggo ke Bank Central Asia BCA 5520166779 a.n. Andreas Tparlaungan Manurung (Indonesia) For those who would like to help support my finances ..please feel free to send it to Bank Central Asia (BCA) account number 5520166779 under the name Andreas Tparlaungan Manurung (Indonesia)

Numeric of Vertical and Horizontal Financial Statement Analysis

In financial statement analysis, vertical and horizontal analyses are the two primary methods for interpreting financial data. "Numeric" refers to the actual figures (dollar amounts, percentages, ratios) used in these calculations.

1. Horizontal Analysis (Trend Analysis)

Purpose: Compares financial data across time (e.g., Year 1 vs. Year 2) to identify growth or decline.

The Numeric:

• Dollar Change: Current Year Amount − Base Year Amount
• Percentage Change: (Dollar Change ÷ Base Year Amount) × 100

Example:
2023 Revenue: $100,000
2024 Revenue: $120,000
Numeric (Horizontal): +$20,000 or +20%

2. Vertical Analysis (Common-Size Analysis)

Purpose: Compares each line item to a base figure within the same period (e.g., each expense as a % of revenue).

The Numeric:

• Percentage of Base: (Line Item ÷ Base Figure) × 100
• Base Figure: Total Assets (Balance Sheet) or Net Sales (Income Statement)

Example:
Net Sales: $100,000
Gross Profit: $40,000
Numeric (Vertical): Gross Profit is 40% of Net Sales

Summary Table

Feature	Horizontal Analysis	Vertical Analysis
Numeric Focus	Dollar & % change over time	% of a base figure
Base	Prior year (or base year)	Total Sales / Total Assets
Output	"Revenue grew 20%"	"COGS is 60% of sales"
Use	Spotting trends	Spotting structural changes

How They Work Together (Numeric Example)

Item	2023 ($)	2024 ($)	Horizontal (% Change)	Vertical 2024 (% of Sales)
Sales	100,000	120,000	+20%	100%
COGS	60,000	78,000	+30%	65%
Gross Profit	40,000	42,000	+5%	35%

Interpretation:

• Horizontal: Sales grew 20%, but COGS grew faster (30%).
• Vertical: COGS now eats up 65% of sales (up from 60%), squeezing profit margins.

In short: Horizontal gives you the change, Vertical gives you the proportion.