Table of Contents
Horizontal Method
Horizontal method refers to the analysis of the company information in a span of time. Various items are taken into consideration when doing this method of analysis. This method enables the management to access the performance of the company over a period of time. The profit levels of a company can be a subject of comparison. In doing this, the management can ascertain that the company is growing of not. In a health care related scenario, the management can use the horizontal method to check whether they are receiving more patients or not. The horizontal analysis method can also be used by the hospital to check the times when more patients arrive in the facility.
The horizontal method is a very important tool in checking the trends in businesses. In hospital scenario, the management may need to discover the amount of moneys that they need to run the facility. This information can be obtained by looking into the past attendance records of patients. the attendance records may indicate a growing number of patients during the day or at night. The record can also be used to know the particular medical cases that a facility receives. A medical facility may be in need of specializing. Areas of specialization include maternity, child care of in patient domain. The decision to select one area and not another can be reached by looking at the patient records.
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Vertical Method
Each item of a financial balance sheet is picked and compared with other variables. For example, the equity, assets and liabilities are picked and compared one to another. This information is very important to investors. The investors need to know whether the firm is growing in assets of liability column. A company with more assets is always said to be profitable. It always ploughs back its profits to increase the asset column. Medical firms always invest in buildings to house their own facilities. These buildings can be categorized as assets. Increase in assets can consequently reduce the liability column.