Part 1 – Vertical and Horizontal Analysis
Vertical Analysis
A vertical analysis is a measure in which the entry of three of the major categories of the balance sheet are represented as a proportion of the total amount. The main advantage is that the balance sheets, income statements and other financial reports can be compared quite easily. The main idea of a vertical analysis is that it identifies each line item of a financial statement as a percentage of the main focus of the statement. For example, on a balance sheet, each line item would be representative of total assets and in a cash flow statement, each line is conveyed as a percentage of the total cash and cash equivalents. The most common use of a vertical analysis is in a financial …show more content…
The net sales of the company demonstrate a slight increase in dollars but when converted to percentage we can see a very slight decrease from 2013 to 2014 to 2015. This decrease in net sales is proportional to the increase in membership and other income for 2015 which is 0.71% for 2014 it is 0.68% and for 2013 it is 0.65%. From the analysis we can see that there is a slight decrease in the operating income from 2012 where in it was at 5.93% to 2015 where it stood at 5.59%. There is an evident decrease in the consolidated net income from 2013 3.63% to 3.36% in …show more content…
But then, we see how for the following years it changes in a positive from 2013 to 2014 by $171 million or 5.61% and from 2014 to 2015 by $204 or 6.34%.
When we look into the operation income and the consolidated net income of Walmart from 2014 in comparison to 2013, it is evident that 2014 was not a positive year for them. Their operating income decreased by $853 million or -3.08%, due to an increase in their administrative, operating and selling expenses in 2014. Yet then when we go into the following year, 2015, we can see an increase in the operating income of $275 million or 1.02%. While that is a positive change we can see by analyzing a little further that it is not as positive as in the previous year’s comparison, 2013 to 2012 where it was $1234 million or 4.66%. The consolidated net income of 2014 showed a decrease of $977 million or -5.75%. However, this decrease did not affect the dividends declared per common share in 2014, actually quite the contrary was demonstrated, a 0.29 or 18.24% increase in the common share
Vertical Analysis
A vertical analysis is a measure in which the entry of three of the major categories of the balance sheet are represented as a proportion of the total amount. The main advantage is that the balance sheets, income statements and other financial reports can be compared quite easily. The main idea of a vertical analysis is that it identifies each line item of a financial statement as a percentage of the main focus of the statement. For example, on a balance sheet, each line item would be representative of total assets and in a cash flow statement, each line is conveyed as a percentage of the total cash and cash equivalents. The most common use of a vertical analysis is in a financial …show more content…
The net sales of the company demonstrate a slight increase in dollars but when converted to percentage we can see a very slight decrease from 2013 to 2014 to 2015. This decrease in net sales is proportional to the increase in membership and other income for 2015 which is 0.71% for 2014 it is 0.68% and for 2013 it is 0.65%. From the analysis we can see that there is a slight decrease in the operating income from 2012 where in it was at 5.93% to 2015 where it stood at 5.59%. There is an evident decrease in the consolidated net income from 2013 3.63% to 3.36% in …show more content…
But then, we see how for the following years it changes in a positive from 2013 to 2014 by $171 million or 5.61% and from 2014 to 2015 by $204 or 6.34%.
When we look into the operation income and the consolidated net income of Walmart from 2014 in comparison to 2013, it is evident that 2014 was not a positive year for them. Their operating income decreased by $853 million or -3.08%, due to an increase in their administrative, operating and selling expenses in 2014. Yet then when we go into the following year, 2015, we can see an increase in the operating income of $275 million or 1.02%. While that is a positive change we can see by analyzing a little further that it is not as positive as in the previous year’s comparison, 2013 to 2012 where it was $1234 million or 4.66%. The consolidated net income of 2014 showed a decrease of $977 million or -5.75%. However, this decrease did not affect the dividends declared per common share in 2014, actually quite the contrary was demonstrated, a 0.29 or 18.24% increase in the common share