Describe the Purpose of Vertical Financial Statement Analysis and How

question 136

Essay

Describe the purpose of vertical financial statement analysis and how it is applied.

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Definitions:

Present Value

The present worth of a future amount of money or series of cash flow at a given return rate.

Payable

This term refers to an amount of money that is due to be paid.

Compounded Annually

Interest on an investment that is calculated once a year, where the interest earned each year is added to the principal.

Loan Principal

The initial amount of money borrowed in a loan, excluding interest and other charges.