Appraise and Generate Common Financial Statement


The analysis of the common-size financial statements can either be a vertical or horizontal analysis statement. Through horizontal analysis of financial statements, you would be able to see two actual data for consecutive years and would be able to accurately do a comparative analysis of each line item. Based on either a horizontal or vertical analysis, you can forecast the future and better understand trends.

For this assignment, present, describe, and illustrate the use of horizontal analyses. You also should form numerical examples to clarify your points. Form clear conclusions on the value gained from the analysis. Additionally, present, describe, and illustrate the use of vertical analyses. Form numerical examples using two comparative companies. Form clear conclusion on the value gained from the analysis. The intent is to take a base metric and express the other matrices in the financial statements as a percentage of this base number. For example, a vertical analysis of the income statement would simply have each income statement measure expressed as a percentage of total sales. The bottom-line number would be net income divided by sales, which is the profit margin ratio. Your analysis of the common-size financial statement should be crisp and clearly define the components and matrices that are to be applied to successfully assess the financial statement.

Length: 5 to 7-page Paper

References: Include a minimum of 5 scholarly resources.

The completed assignment should address all of the assignment requirements, exhibit evidence of concept knowledge, and demonstrate thoughtful consideration of the content presented in the course. The writing should integrate scholarly resources, reflect academic expectations and current APA standards