Vertical Analysis Of Unilever

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In the 1890s, William Hesketh Lever, founder of Lever Bros, wrote down his ideas for Sunlight Soap – his revolutionary new product that helped popularize cleanliness and hygiene in Victorian England. It was 'to make cleanliness commonplace; to lessen work for women; to foster health and contribute to personal attractiveness, that life may be more enjoyable and rewarding for the people who use their products '. In a history that now crosses three centuries, Unilever 's success has been influenced by the major events of the day – economic boom, depression, world wars, changing consumer lifestyles and advances in technology and throughout they 've created products that help people get more out of life – cutting the time spent on household…show more content…
Each item of the statement is compared to the same item in the previous year and can be expressed as a dollar or percentage increase or reduction on a comparative financial statement. Vertical Analysis Vertical analysis shows each account on financial statement in dollars and as a percentage of another item. The vertical analysis of a balance sheet shows the amount of each item as a percentage of the total assets. Each item on an income statement is shown as a percentage of sales. Summary Horizontal analysis and vertical analysis are important parts of financial statement analysis. It 's important for investors, managers, and others to have an idea of how a company can be expected to perform in the future. These analyses arrange data on the current and past statements in a way that show important relationships regarding this. • Vertical analysis shows financial data on the current year’s financial statements that is more company specific and in the current timeframe. Each item is expressed as a percentage of the total for the accounts in its category and can be easily compared to other company 's…show more content…
• Horizontal analysis compares current year financial statement items to the previous year’s items and increases or decreases are expressed as percentages. This makes comparisons to other companies or industry averages easier. • Trend analysis takes horizontal analysis further using several time periods and trend percentages in a way that can show developing trends. • As far as horizontal analysis versus vertical analysis can be thought of, the contrast is distinct but together these forms of analysis help analysts and investors make intelligent projections concerning a company’s future performance. Ratio Analysis Ratio analysis involves the calculation and comparison of ratios which are derived from the information given in the company 's financial statements. The historical trends of these ratios can be used to make inferences about a company 's financial condition, its operations and its investment attractiveness and whether the company has improved or deteriorated in the past few years. Financial ratio analysis groups the ratios into categories that tell us about the different sides of a company 's financial state. Some of those categories are described below: Financial Ratio Classifications  Liquidity  Profitability

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