About Vertical Analysis Calculator (Formula)
Vertical analysis is a financial analysis technique used to evaluate the relative proportions of different line items on a financial statement. It is also known as common size analysis because it expresses each line item as a percentage of a common base amount.
A Vertical Analysis Calculator is a tool that can be used to calculate the vertical analysis ratio for a given line item and base figure.
The formula for the vertical analysis ratio is:
VA = (SL / B) * 100
Where VA is the vertical analysis percentage, SL is the amount of the line item being analyzed, and B is the total base figure for the financial statement.
To use the Vertical Analysis Calculator, you simply need to input the amount of the line item and the total base figure into the appropriate fields. Once you click the calculate button, the calculator will use the formula above to compute the vertical analysis ratio and display the result.
The vertical analysis ratio can be a useful tool for financial analysis, as it provides insight into the relative importance of different line items on a financial statement. By comparing the vertical analysis ratios for multiple periods or for different companies, you can identify trends and patterns that can help inform investment or business decisions.