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Vertical Analysis
Term category: Finance/Accounting
In 10 words or less: A method of analyzing financial statements that looks at the breakdown for one period.

Definition: Vertical analysis puts the balance sheet and income statement into percentage terms.  This allows you to compare, for example, what percent of sales is spent on marketing.

Example:

Sales                   100%
COGS                    79%

Gross Margin         21%

SG&A                      7%

Operating Margin   14%

 

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