Vertical Analysis Income Statement Example

An example of the vertical analysis of balance sheet and income statement is given below.

Vertical analysis income statement example. 530 000 1 230 500 100 43 3. Have remained quite stable during the last three years. 550 000 1 139 500 100 48 3 2017. The cost of sales has been in the range of 41 44 historically.

In the below snapshot we have divided each income statement line item with net sales for the period between 2007 to 2015. Cost of goods sold. You can use vertical analysis on an income statement balance sheet or cash flow statement to understand the proportions of each line item to the whole understand key trends that occur over time compare multiple companies of varying sizes or compare a company s financial statements to averages within their industry. In the above vertical analysis example we can see that the income decreases from 1 st year to 2 nd year and the income increases to 18 in the 3 rd year.

The below vertical analysis example helps to understand the comparison. Comparative income statement with vertical analysis. Vertical analysis of income statement income statement item total sales 100 similarly calculate for the years 2017 and 2016 in the above table it can be seen that the gross profit margin operating income margin and net income margin of apple inc.