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12.4 For example, financial statement users could
use vertical analysis to compare IBM with the
much smaller Apple Computer. Financial Statement Analysis – Module 1 Financial Statement Analysis – Module 1 Vertical
sizes. Regardless of the specific technique used, the
essential point is that accounting numbers are
virtually meaningless in isolation. Their value
derives from comparison with other numbers.
For example, a baseball player gets 45 hits.
Does this indicate a satisfactory performance
by the player?
It depends on the number of at-bats. Although Chicago Cereal s net sales are less than those of
General Mills, vertical analysis eliminates the impact of this
size difference for our analysis. Fi...
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This note was uploaded on 01/19/2014 for the course ACCTMIS 2200 taught by Professor Smith during the Spring '12 term at Ohio State.
- Spring '12