10. Vertical Analysis
Common Size Financial Statements & Percentage Analysis
1. Income Statement Vertical Analysis
Each income statement item as a percentage of Revenue
Illustrative Demo Data · ₹ Cr
Previous Year
Current Year
Revenue100% / 100%
Expenses79.05% / 77.60%
EBITDA20.95% / 22.40%
Net Profit13.33% / 14.80%
Formula — Income Statement Common Size
EBITDA = (₹280 Cr ÷ ₹1,250 Cr) × 100 = 22.40%
Net Profit = (₹185 Cr ÷ ₹1,250 Cr) × 100 = 14.80%
Item Percentage = (Individual Item ÷ Revenue) × 100
Demo Calculation — Current Year
Expenses = (₹970 Cr ÷ ₹1,250 Cr) × 100 = 77.60%EBITDA = (₹280 Cr ÷ ₹1,250 Cr) × 100 = 22.40%
Net Profit = (₹185 Cr ÷ ₹1,250 Cr) × 100 = 14.80%
2. Expense Structure Analysis
Breakdown of expenses as a percentage of Revenue
Illustrative Demo Data · Current YearOperating Expenses52.00%
Employee Expenses12.00%
Other Expenses13.60%
Formula — Expense Percentage
Employee Expenses = (₹150 Cr ÷ ₹1,250 Cr) × 100 = 12.00%
Other Expenses = (₹170 Cr ÷ ₹1,250 Cr) × 100 = 13.60%
Important These expense categories are illustrative allocations. They are not additional verified company figures.
(Individual Expense ÷ Revenue) × 100
Demo Calculation
Operating Expenses = (₹650 Cr ÷ ₹1,250 Cr) × 100 = 52.00%Employee Expenses = (₹150 Cr ÷ ₹1,250 Cr) × 100 = 12.00%
Other Expenses = (₹170 Cr ÷ ₹1,250 Cr) × 100 = 13.60%
Important These expense categories are illustrative allocations. They are not additional verified company figures.
3. Profitability Structure
Profit levels as a percentage of Revenue
Illustrative Demo Data| Profit Metric | Value (₹ Cr) | Margin |
|---|---|---|
| Gross Profit | 475 | 38.00% |
| EBITDA | 280 | 22.40% |
| EBIT | 225 | 18.00% |
| Net Profit | 185 | 14.80% |
Formula — Profitability Margins
Gross Profit Margin = (Gross Profit ÷ Revenue) × 100
EBITDA Margin = (EBITDA ÷ Revenue) × 100
EBIT Margin = (EBIT ÷ Revenue) × 100
Net Profit Margin = (Net Profit ÷ Revenue) × 100
Demo Calculation Gross Profit Margin = (₹475 ÷ ₹1,250) × 100 = 38.00%
EBITDA Margin = (₹280 ÷ ₹1,250) × 100 = 22.40%
EBIT Margin = (₹225 ÷ ₹1,250) × 100 = 18.00%
Net Profit Margin = (₹185 ÷ ₹1,250) × 100 = 14.80%
EBITDA Margin = (EBITDA ÷ Revenue) × 100
EBIT Margin = (EBIT ÷ Revenue) × 100
Net Profit Margin = (Net Profit ÷ Revenue) × 100
Demo Calculation Gross Profit Margin = (₹475 ÷ ₹1,250) × 100 = 38.00%
EBITDA Margin = (₹280 ÷ ₹1,250) × 100 = 22.40%
EBIT Margin = (₹225 ÷ ₹1,250) × 100 = 18.00%
Net Profit Margin = (₹185 ÷ ₹1,250) × 100 = 14.80%
4. Balance Sheet Vertical Analysis
Each balance sheet item as a percentage of Total Assets
Illustrative Demo Data · ₹ Cr| Asset Category | Value | % of Assets |
|---|---|---|
| Current Assets | 280 | 40.00% |
| Non-Current Assets | 420 | 60.00% |
| Total Assets | 700 | 100.00% |
Current Assets
Non-Current Assets
Current Assets40%
Non-Current Assets60%
Formula — Asset Composition
Non-Current Assets = (₹420 ÷ ₹700) × 100 = 60%
Asset Percentage = (Individual Asset ÷ Total Assets) × 100
Demo Calculation
Current Assets = (₹280 ÷ ₹700) × 100 = 40%Non-Current Assets = (₹420 ÷ ₹700) × 100 = 60%
5. Liabilities & Equity Structure
Capital structure as a percentage of Total Assets
Illustrative Demo Data · ₹ Cr| Capital Structure | Value | Percentage |
|---|---|---|
| Total Liabilities | 280 | 40.00% |
| Shareholders’ Equity | 420 | 60.00% |
| Total | 700 | 100.00% |
Total Liabilities40.00%
Shareholders’ Equity60.00%
Formula — Capital Structure
Liabilities Percentage = (Total Liabilities ÷ Total Assets) × 100
Equity Percentage = (Shareholders’ Equity ÷ Total Assets) × 100
Demo Calculation Liabilities = (₹280 ÷ ₹700) × 100 = 40%
Equity = (₹420 ÷ ₹700) × 100 = 60%
Balance Sheet Check Total Assets = Total Liabilities + Shareholders’ Equity
₹700 Cr = ₹280 Cr + ₹420 Cr
Equity Percentage = (Shareholders’ Equity ÷ Total Assets) × 100
Demo Calculation Liabilities = (₹280 ÷ ₹700) × 100 = 40%
Equity = (₹420 ÷ ₹700) × 100 = 60%
Balance Sheet Check Total Assets = Total Liabilities + Shareholders’ Equity
₹700 Cr = ₹280 Cr + ₹420 Cr
6. Year-on-Year Common Size Comparison
Comparison of key income statement percentages
Illustrative Demo Data
Previous Year
Current Year
13.3%
14.8%
Net Profit
21.0%
22.4%
EBITDA
79.0%
77.6%
Expenses
Formula — Common Size Comparison
Previous Year % = (Previous Year Item ÷ Previous Year Revenue) × 100
Current Year % = (Current Year Item ÷ Current Year Revenue) × 100
Demo Calculation — Net Profit Previous Year = (₹140 ÷ ₹1,050) × 100 = 13.33%
Current Year = (₹185 ÷ ₹1,250) × 100 = 14.80%
Current Year % = (Current Year Item ÷ Current Year Revenue) × 100
Demo Calculation — Net Profit Previous Year = (₹140 ÷ ₹1,050) × 100 = 13.33%
Current Year = (₹185 ÷ ₹1,250) × 100 = 14.80%
7. Vertical Analysis Summary
Key common-size financial indicators
Illustrative Demo Data
Gross Profit Margin
38.00%
EBITDA Margin
22.40%
Net Profit Margin
14.80%
Asset Composition
40 / 60
Liabilities Share
40.00%
Equity Share
60.00%
Summary Formulas
Gross Profit Margin = (Gross Profit ÷ Revenue) × 100
EBITDA Margin = (EBITDA ÷ Revenue) × 100
Net Profit Margin = (Net Profit ÷ Revenue) × 100
Asset Composition = (Asset Category ÷ Total Assets) × 100
Liabilities Share = (Total Liabilities ÷ Total Assets) × 100
Equity Share = (Shareholders’ Equity ÷ Total Assets) × 100
EBITDA Margin = (EBITDA ÷ Revenue) × 100
Net Profit Margin = (Net Profit ÷ Revenue) × 100
Asset Composition = (Asset Category ÷ Total Assets) × 100
Liabilities Share = (Total Liabilities ÷ Total Assets) × 100
Equity Share = (Shareholders’ Equity ÷ Total Assets) × 100
Vertical Analysis helps compare financial statement components in percentage terms, making it easier to understand cost structure, profitability and capital composition.
Disclaimer: All figures are illustrative educational demo values, not verified company financial statements or live financial data. Expense category figures are illustrative allocations.