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Hello class, Vertical Analysis can be described as the analyzation process of a financial statement which breaks down each individual item on the sheet as
Hello class, Vertical Analysis can be described as the analyzation process of a financial statement which breaks down each individual item on the sheet as a percentage of a whole figure within the statement. The first line of the statement will display the figure as a whole, 100% value, with each following line representing an individual "piece" of the total. It is coined "vertical analysis" because it breaks down categories sequentially, from top to bottom. Horizontal Analysis, (much more simply put) is the method of analysis that compares individual aspects of financial performance from one period on time to the next. It is read in the opposite direction that vertical analysis is read in, hence the contrasting names. 3 controls associated with integrated financial statements are- 1: The accounting equation must stand true and be balanced. 2: On the income statement, the net income must equal the net effects of revenues and expenses on the retained earnings section. 3: The ending cash amount on the statement of cash flows and the cash on the balance sheet must be equal
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