Financial analysis is a broad topic and involves the calculation of various types of financial ratios. But in this topic, we will target topics such as Horizontal, vertical and common size analysis.
In order to evaluate the entity’s performance over a long period of time, it is necessary to take support from these types of analyses. By exercising these sorts of analysis, very interesting facts come into the knowledge of the entity which can hardly be identified through other means. That is why financial analyst takes great support from these analyses to interpret the financial figures and create a commentary or reports analysis to interpret the financial figures and create a commentary or reports.
Types of Financial Analysis
- Horizontal analysis
- Vertical analysis
- Common size analysis