What is the best type of financial analysis?
Asked 4 years ago
I tried to look up how to do a financial analysis, and so many different types came up. Consequently, I hit a blank. Which kind of analysis do you recommend I do? Thank you!
Demarcus Reynolds
Wednesday, February 16, 2022
There are 9 most common financial analyses, each of them being of different purposes. There is vertical analysis, horizontal, leverage, growth, profitability, liquidity, efficiency, cash flow, and rates of return.
A vertical analysis is used to compare the margin of your business to other businesses. While a horizontal analysis is comparing financial data of your company for several years and determining if the business is growing. A liquidity analysis shows whether a company can meet its short-term obligations.
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