Hi, what is the main difference between Horizontal and Vertical analysis?

They look the same at first glance.

Hi Daniel, if you read our previous posts on vertical and horizontal analysis, it can be seen that their main difference is that horizontal analysis deals with multiple periods of reporting, while vertical analysis focuses on the numbers within a single period. If you are still confused, please watch this video. Best wishes.

Vertical analysis is the method of analysis of financial statements where each line item is listed as a percentage of another item to conduct useful decision making. Here, each line item on the income statement is expressed as a percentage of sales revenue and each line item on the balance sheet is expressed as a percentage of total assets

A horizontal analysis, also referred to as ‘trend analysis’, is a procedure in the financial analysis where the amounts of financial information over a certain period of time is compared line by line in order to make related decisions.

I think the difference between horizontal and vertical analysis is that the former considers the total amount as a percentage in the financial statement over many consecutive years, while the latter talks about each amount separately in the financial statement as a percentage for another amount.