Differentiate the following:
Vertical analysis is a method of analyzing financial statements in which each item in the statement is represented as a percentage of a single larger item. This method of analysis may be used with both balance sheets and income statements as a way of coherently comparing large monetary amounts and making sense of the data. One of the advantages of vertical analysis is that it makes comparisons between companies of different sizes within the same industry easier to prepare. It also allows a company to weigh its current reports against reports from its past, revealing possible trends or areas that need improvement.
Looking at the raw data on a financial statement can be relatively meaningless without some sort of benchmark to which the numbers can be compared. Vertical analysis solves this problem by relating all items on a balance sheet to a single item, forming what is known as a common-size balance sheet. Common-size balance sheets are easily compared to the statements of other companies as well as to older sheets from within one company.
Horizontal analysis refers to a type of fundamental analysis in which a financial analyst uses certain financial data to assess a company’s performance over time. The analyst compares the same items or ratios for a particular company over a period of time in order to assess the company’s growth during that time. Horizontal analysis can also be performed on multiple companies in the same industry, to assess a company’s performance relative to its competitors.
The data used in horizontal analysis is found in a company’s financial statements, which include the balance sheet, income statement, and statement of cash flows. It can be line items, such as expense items, or it can be a ratio. A ratio is determined by comparing two or more items, for example, dividing expenses by net sales to determine the operating ratio.
Legacy
In information technology, legacy applications and data are those that have been inherited from languages, platforms, and techniques earlier than current technology. Most enterprises who use computers have legacy applications and databases that serve critical business needs. Typically, the challenge is to keep the legacy application running while converting it to newer, more efficient code that makes use of new
technology and programmer skills. In the past, much programming has been written for specific manufacturers' operating systems. Currently, many companies are migrating their legacy applications to new programming languages and operating systems that follow open or standard programming interfaces. Theoretically, this will make it easier in the future to update applications without having to rewrite them entirely and will allow a company to use its applications on any manufacturer's operating system. In addition to moving to new languages, enterprises are redistributing the locations of applications and data. In general, legacy applications have to continue to run on the platforms they were developed for. Typically, new development environments account for the need to continue to support legacy applications and data. With many new tools, legacy databases can be accessed by newer programs.
Brick and Mortar stands for a store or business in the real world, that either doesn't have a web presence or has mainly physical locations as opposed to websites. Bricks and mortar are common building materials.
Most brick and mortar companies have been in their respective field of service since before the dot-com boom of the 1990s. An example would be the brick and mortar movie rental shop vis-à-vis the competition from the new online rental services offered by Netflix.
In the 21st century, where the internet has become rampant and many internet-based businesses still prefer the traditional brick and mortar approach. This phenomenon is probably accepted by many because of the availability of lucrative franchises and other business opportunities. In addition, many may see investing on physical projects as more adequate than going online.
Bricks and mortar refers to businesses that have physical (rather than virtual or online) presences - in other words, stores (built of physical material such as bricks and mortar) that you can drive to and enter physically to see, touch, and purchase merchandise. This term is used as the basis for the term click and mortar, a business that sells products and services on the Web as well as from physical locations.
In an ongoing trend, large businesses that existed before the invention of the Web (and were therefore bricks and mortar businesses) are becoming clicks and mortar businesses. Companies like Amazon.com and others that have never owned a bricks and mortar storefront are generally known as dotcom companies.
XML (Extensible Markup Language) is a flexible way to create common infromation formats and share both the format and the data on the World Wide Web, intranets, and elsewhere. For example, computer makers might agree on a standard or common way to describe the information about a computer product (processor speed, memory size, and so forth) and then describe the product information format with XML. Such a standard way of describing data would enable a user to send an intelligent agent (a program) to each computer maker's Web site, gather data, and then make a valid comparison. XML can be used by any individual or group of individuals or companies that wants to share information in a consistent way.
