What base should I use for income statement vertical analysis?

Net revenue is the base for income statement vertical analysis. Every other line — COGS, gross profit, SG&A, operating income, net income — is expressed as a percentage of net revenue.

What base should I use for balance sheet vertical analysis?

Total assets is the base for balance sheet vertical analysis. Every asset, liability, and equity line is expressed as a percentage of total assets. Since total assets equal total liabilities plus equity, both sides sum to 100%.

💰 Finance calculator

Vertical Analysis Calculator

Build a common-size income statement or balance sheet in seconds. Enter your dollar figures and every line is instantly expressed as a percentage of revenue (income statement) or total assets (balance sheet) — with colour-coded ratios and plain-English interpretation of key margins.

Choose a statement type

Select Income Statement or Balance Sheet, enter your figures, and click Calculate to build your common-size analysis.

Currency

Enter revenue and cost/expense lines. Every item will be expressed as a % of net revenue.

🟡 Revenue (base = 100%)

Net revenue

Base — always 100%

🔴 Cost of goods sold

Cost of goods sold (COGS)

Direct product costs

🟢 Operating expenses (SG&A)

Selling expenses

Advertising, commissions, outbound freight

G&A expenses

Admin salaries, office rent, legal

R&D expenses (optional)

Product development, research costs

🔵 Below operating income

Interest expense

Debt service costs

Income tax expense

Leave blank to skip

Enter asset, liability, and equity balances. Every item will be expressed as a % of total assets.

🟢 Current assets

Cash & equivalents

Accounts receivable

Inventory

Other current assets

🔵 Non-current assets

Property, plant & equipment (net)

Intangibles & goodwill

Other non-current assets

🔴 Current liabilities

Accounts payable

Short-term debt

Other current liabilities

🟠 Non-current liabilities & equity

Long-term debt

Other non-current liabilities

Total equity

Common-Size Statement

Enter your figures and click Calculate to build your vertical analysis.

Key ratio

—

Full common-size statement

Line item	Amount	%
Enter values and click Calculate

What this means

Enter your figures above and click Calculate.

What to do next

Compare your common-size percentages against prior periods or industry benchmarks to identify structural changes.

→ Guide: How to Calculate Vertical Analysis

→ Horizontal Analysis Guide — track change across periods

→ Margin Calculator — model gross and operating margin

Vertical analysis formula

% = (Line item ÷ Base) × 100
IS base: Net revenue = 100%
BS base: Total assets = 100%
Every other line is a proportion of the base.

Why common-size statements?

Dollar amounts change as businesses grow. Percentages reveal whether the structure is changing — e.g. whether COGS is consuming more of each revenue dollar over time, even as absolute revenue grows.

Tip: run this calculator on two consecutive years and compare the % columns side by side. A rising COGS% signals margin compression even if raw revenue grew. That's the power of vertical analysis over raw dollar comparisons.

Income statement vertical analysis benchmarks

COGS % — Manufacturing: 55–65% · Retail: 60–75% · SaaS: 20–35%

Gross margin % — Manufacturing: 35–45% · Retail: 25–40% · SaaS: 65–80%

SG&A % — Lean manufacturers: 10–15% · B2B services: 20–30% · Early-stage SaaS: 40–60%

Operating margin % — Healthy: 10–20% · Strong: 20%+ · Concerning: <5%

Net margin % — Average across industries: 5–10% · Strong: 15%+

Frequently asked questions

What is vertical analysis?

Vertical analysis expresses each line item as a percentage of a base figure — net revenue for income statements, total assets for balance sheets. The result is a common-size statement that can be compared across companies and periods regardless of scale.

What base figure should I use?

Income statement: use net revenue. Balance sheet: use total assets for all lines — both the asset side and the liabilities + equity side. Total assets always equals total liabilities plus equity, so both sides sum to 100%.

How do I compare two companies using vertical analysis?

Run vertical analysis on both companies' statements independently. Then compare the % columns directly. Since both are normalised to 100%, a company with $10M revenue and one with $500M revenue can be compared on cost structure and margin profile without the scale difference distorting the comparison.

What does a rising COGS% mean?

Gross margin is compressing — the business keeps fewer cents of profit per revenue dollar. Causes include rising input costs, supplier price increases, product mix shifts to lower-margin lines, or an inability to pass cost increases on to customers through pricing.

Related finance calculators

These tools pair naturally with vertical analysis.

Disclaimer

Results are based on the figures you enter. Vertical analysis percentages are most useful when compared against prior-period data, industry benchmarks, or management targets. This tool does not perform audits or validate the accuracy of your input figures.