Professional Documents
Culture Documents
1. Horizontal Analysis
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2. Vertical Analysis
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Income statement:
Vertical Analysis Percentage = (Specific item/Base amount) * 100
Balance sheet:
The base amount for each liability and equity item is Total Liabilities and Equity
3. Comparing Companies
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Evaluating Profitability
Rate of Return on Total Assets = (Net income + Interest expense)/Average total assets
Price/Earnings Ratio = Market price per share of common stock/Earnings per share
Earnings Problems