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46) Horizontal and vertical analyses are analytical tools frequently used to analyze financial statements. What type of infor
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Horizontal analysis of financial statement means analysing financial statements from year to year, percentages and analysis are made fixing a base year.

Vertical analysis analyses financial statements line by line. One item in the statement is compared with another item in the same statement. Comparison and statements are made comparing line by line items.

Both vertical and horizontal analysis can be used for comparison between industries and competitive companies. Vertical analysis let's u compare performance of a particular year while horizontal analysis helps you to compare performance of with past years.

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