Income Statement Vertical Analysis
Description: This income statement template is setup to reflect a two year period along with a vertical analysis of each year. The vertical analysis is based on net revenue – the most common denominator used in a vertical analysis of the income statement. The purpose of a vertical analysis is to perform a proportional analysis of each individual line item relative another line item. One way to add additional insight to such an analysis is to evaluate the proportions of income statement line item over time in order to identify trends, outliers, or potential errors. The income statement provided here is a template that has been constructed with common line items which can be added to, or removed as needed. When rows are added or deleted, the formulas need to be reviewed in order to ensure they are capturing the new items We've also included notes on certain line items in order to provide additional information for that line.
Learn about and download a vertical analysis of the balance sheet here.
Note, this template is setup as an example. The facts and circumstances surrounding individual transactions will dictate how and where those transactions are classified.
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* Note, utilizing the features of this excel template requires Microsoft Excel® 2007 or later - some of the attributes such as the shading, formulas, and other formatting are not compatible with earlier versions.