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Distinguish between Vertical and Horizontal Analysis of financial data.

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Basis of DifferenceHorizontal AnalysisVertical Analysis
MeaningIf refers to the comparison of and item of the financial statement of one period of periods to its corresponding item of the base accounting periodIf refers to the comparison of item -items of the financial statement to the common item of the same accounting period
PurposeIts purpose is to determine the change in an item during an account period. The change in the item is expressed either in absolute figure or in percentage or in both termsIts purpose is to determine the proportion item/items to the common item of the same account period. the change in the item is expressed either in ration or in percentage terms.
Usefulness It indicates growth or decline of the itemIt helps in predicting and determining the future relative proportion of an item to the common item.

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