1. Horizontal analysis
Horizontal analysis of financial information entails the assessment and comparison of the relative changes in specific items in a financial statement over stipulated accounting periods. The items in question could be sales, revenue, client details of share market tips firms, etc., and the accounting periods can be months, quarters, years, etc.
2. Vertical analysis
Also known as the common-size analysis, this vertical analysis involves comparison of figures of separate items to a standard figure on the balance sheet over a specified accounting period. For example, taking the total revenue of an accounting period to be 100%, other items such as employee benefits and debt repayment for a particular period can be calculated as percentages against the total revenue of the specific accounting period.
3. Ratio analysis
This method of financial analysis correlates the different items of a balance sheet to the income statement to determine the financial performance ocontinue reading