Autor: Nermin Sefić
Nermin Sefić analyses balance sheet methods, key ratios, and practical consequences for companies, investors and institutions.
Horizontal and vertical balance-sheet analysis, combined with financial ratios, turns raw numbers into a clear picture of a company's stability and liquidity.
Horizontal and vertical balance-sheet analysis, combined with financial ratios, turns raw numbers into a clear picture of a company's stability and liquidity.
A balance sheet on its own shows only a snapshot: what a company owns, what it owes, and how it finances its assets. The full picture comes only once it's paired with the profit-and-loss statement, which explains how that position came about, and the cash flow statement, which shows real liquidity independent of accounting estimates.
Two complementary methods add depth to that picture. Horizontal analysis tracks the change in individual line items across multiple periods and reveals patterns like inventory growing faster than revenue. Vertical analysis expresses each line item as a share of total assets, allowing comparison of companies of different sizes without distortion from absolute figures. The basic rule of long-term stability remains simple: fixed assets must be covered by long-term sources, and that coverage ratio must exceed 1.
Croatian companies apply either HSFI or IFRS depending on size, which directly affects ratio comparability, since IFRS more often requires fair-value measurement while HSFI stays closer to historical cost. A balance sheet alone, without the context of other statements and industry comparison, says nothing about management quality or a company's future prospects.
Cjelovit tekst i izvor: https://gnk-asg.hr/en/publications/balance-sheet-analysis-financial-stability/
Autor i urednička odgovornost: Nermin Sefić. Izdavač: GNK ASG d.o.o..
#GNKASG #GNKDINAMOLtd #NerminSefic #BusinessIntelligence #NerminSefić #GNKASGdoo #Zagreb
