One type of analysis that is often performed by companies, but is not covered in the text is a trend analysis. Using the data obtained from a vertical analysis a company will identify an area of concern. For example, if they believe that their temporary personnel are higher than expected one month, they may decide to monitor it more closely going forward. Thus they will perform a trend analysis by looking at what is being spent month over month to determine if this was a one time spike or if there is an underlying reason that is causing the amount to be higher this period. This is often how mistakes in accounting are discovered. What are your thoughts?
Have you ever considered other ways that you may be able to use these analyses, such as in your personal life or work environment?horizontal analysis and vertical analysis