If an analyst wishes to see how gross profit of a company has changed from one year to the next, vertical analysis would be the best approach.

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Vertical analysis is used to compare the different items on a company's financial statement to its total assets or revenues, to determine the relative proportion of each item. To compare the changes in gross profit from one year to the next, the analyst would use horizontal analysis, which compares the same item across different periods.

If an Analyst Wishes to See How Gross Profit of a Company