The analysis of the income statement involves comparing the, Ask an Expert

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The analysis of the income statement involves comparing the different line items within a statement, as well as following trend lines of individual line items over multiple periods. This analysis is used to understand the cost structure of a business, and its ability to earn a profit .How would you attack your analysis of the income statement in order to manage your business? Would you use a vertical analysis, horizontal analysis, which ratios, etc?

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