Vertical analysis? It is a useful tool for accountants when dealing with income statements or balance sheet analysis.

Vertical analysis is a proportional analysis tool used by accountants on the income statement or balance sheet. It is usually used in conjunction with another tool called horizontal analysis to provide an accountant with a better overview. Vertical analysis can also make the comparison among the companies in the same sector much easier since one can see the relative proportions of account balances. For a better understanding of vertical analysis, please watch the video below.