For example, when a vertical analysis is done on an income statement, it will show the top line sales number as 100%, and every other account will show as a percentage of the total sales number.

On an income statement you conduct vertical analysis by converting each line into a percentage of gross revenue. On a balance sheet you would typically state each line as a percentage of total assets.

ABC Company's income statement and vertical analysis demonstrate the value of using common-sized financial statements to better understand the composition of a financial statement.

For example, when a vertical analysis is done on an income statement, it will show the top line sales number as 100%, and every other account will show as a percentage of the total sales number.