Vertical balance analysis is an important way to diagnose the profitability of an enterprise. Ideal for comparing the work of one organization with another, even if they differ in their specificity. However, not everyone succeeds in compiling it competently. Readers will be able to understand how this is done, by analogy. The vertical balance analysis, an example of which we propose in this article, is simple to understand and correct enough to emulate. Just follow what we do and substitute your numbers.
Vertical balance analysis is performed in two tables. First, draw one and draw its hat. So, in 1 table there will be 4 columns: 1 - wide - the names of the articles will be concentrated in it, and the remaining 3 - smaller - they contain only numbers. Rows in the table should be 39. 1 row of 1 column is the balance sheet of the enterprise, the second is called “Working capital”, the third contains “Assets”, the fourth - “Cash”. The fifth one contains securities - the value of shares, etc. The sixth contains receivables. In the seventh write - "Bills receivable." The eighth row is the product (cost), 9 - prepaid expenses, in the tenth row you insert - “Working capital, total” - and later in these lines of each column you will knock down the general balance of working capital. Then comes line 10 - it has fixed assets. In line 11 - Buildings, equipment - initial cost "and other property of the enterprise, line 12 is called" Depreciation ", 13 -" Buildings and equipment - current value ". Line 14 -" Investment ", line 15 is called" Trademarks ". At 16 you write “Goodwill”, and at 17 put “Total: fixed assets.” Here again, you will knock down the subtotals for fixed assets. Go to line 18: in it we mark the total for assets again and write: “Assets - Total".
Now we are engaged in liabilities - line 19. At 20 we write - “Short-term debts”, at 21 we place credit debts, and at 22 - bills receivable. The twenty-third line is the accrued liability. 24th line - a bank loan. In line 25 we put “Current portion of long-term debt”, and in line 26 we write “Tax arrears”. Then we knock out the result in line 27 - "Short-term debt of all." In line 28 we write “Debt long-term”, and in line 29 - “Bonds payable”. We turn to line 30, write in it - "Long-term bank loan." And at 31 we mark - “Profit tax with deferment”. Then in line 32 it remains only to write: "Total: long-term debt." And in 33 we fill in this way: “Personal capital”, in line 34 we mark: “Shares at 12%”, and line 35 we call “Shares with a lower par value”. 36 line - "Additional funds of the company", 37 - "Profit without distribution", 38 - "Total: equity", and in line 39 - "Total liabilities". Vertical analysis, an example of which we give, is drawn up according to the following points: column 2, 3 and 4, call the time periods for which the data that you found. You can do it on 01.01. 2005, then the second - 01.01.2006, and the third - 01.01.2007. And now in each column write down the data for each year. After that, carry out the calculations in the summary lines for the asset, liability and equity. So you can easily do a vertical balance analysis. True, it will take a lot of time, but it’s worth it: correctly drawn conclusions from the analysis help to eliminate the problems of the enterprise and increase profits.
The second table contains a vertical analysis of the revenue balance, with a total of 21 rows and 4 columns. Names of lines - revenue, cost, costs, remuneration, costs, depreciation, gross income, etc. Making this table easier than the first, because most of the data you just rewrite from it. So with just 2 tables and a day of work on computing, you can provide your company with years of productive and profitable work. That is what vertical balance analysis is important.
