 QuickBooks Online 2024, vertical analysis, profit and loss, PNL or income statement. Get ready and relax because it's so easy using QuickBooks Online, you'd think it'd be a crime. But it's not unless you're doing bookkeeping for like porch pirates or something. But anyways, let's get into it. Here we are online in our browser searching for QuickBooks Online test drive looking for the result that has Intuit.com in the URL, Intuit being the owner of QuickBooks, selecting the United States version of the software and verifying that we're not a robot. Opening up the major financial statement reports like we do every time the reports are on the left hand side. We're in the favorites. We're going to be right clicking on that balance sheet, open link in new tab, right click on the profit and loss, open link in new tab. Let's go to that middle tab that we just opened, close up the hamburger and change the range. Going back to 2023, 010123 tab, 123123 tab, run it to refresh it. Let's tab to the right where our income statement or profit and loss is. Close the hamburger and once again go back in time, 010123 tab, 123123 tab, run it. It's just like having a time machine, having QuickBooks just like having a time machine. Note that the income statement is our performance report as we've discussed in prior presentations as opposed to the balance sheet. We enter the date range up top which is actually reflected on the report as opposed to the balance sheet which is as of a point in time. We still have the range that we do an input on for the balance sheet and that's because when we drill down on the numbers in the balance sheet we will have a range type of report and it helps us to do our comparative types of reports. Let's go to the income statement now and now we're going to be thinking about a vertical analysis type of report. Quick comparison of the vertical analysis on the income statement versus the balance sheet. If I go back to the balance sheet we did this in a prior section. If I select the dropdown you can see there's less information in the dropdown and all we have down here is the percent of row and percent of columns. If I select the percent of columns on the balance sheet and run that one we're comparing everything to the bottom line of the balance sheet which you can say is total liabilities and equity which is equal to the total assets. So all the assets are being divided by the I mean all the asset individual assets like the bank accounts 201 are being divided by the bottom line of each section assets equal liabilities plus equity divided by 23436.29 and that's giving us our 8.54 about. So then if I go to the income statement it's a little bit different. If I select the dropdown you can see we have these different different more at least options. So we have the percent of rows that's not going to be too helpful for us with our with this particular report we're just going to get the 100 percent because we only have one column there. But if I select the dropdown and undo that one and I say we want the percent of column so let's select that one. So I'll run that one. So this is not really the traditional vertical analysis that we would think of because this is comparing it to the bottom line of net income. So you could see net income down here is at the 100 percent. So that there might be some uses for that because that's given us kind of a ratio analysis of each line item both income and expense compared to the net income. So in other words if I took my my income line here of four seven three six point four seven divided by and I go down divided by the one six seven six point four six then we're going to get if I go back on up hold on a second if I go back on up and I move the decimal two places over we get two hundred and eighty two point five three percent right and I could do the same thing for my expenses any of the line items and you can tell what's being used as the factor that's going to be involved in all of the ratios because it's going to be 100 percent that'll be the line that's 100 percent. So that's interesting probably not the report that we look at the most. The other one is the percent of income. So if I can choose the percent of income and that's comparing to everything basically to the income line item right here this is actually the one that we use most often you might say well why would that be why wouldn't it be the bottom line of the report. And one of the reasons would be well the income is actually what we're trying to do that's the goal of the business revenue generation is what we're trying to do. So what we're going to think about then is look at the total income and then think about all other line items as compared to the total income line item both income and expenses. So on the income side that of course makes perfect sense because it's kind of like what you would see over here on the assets right we're comparing each individual asset to the total assets to look at the ratio of where our assets are located that can help us with our comparisons as we benchmark to another company. Same with it this side of things right if we have different types of income in our business if I was to compare to another landscaping company I'm trying to benchmark them trying to mirror them I can't just look at my dollar amounts and really be able to tie that into what they're doing because they're larger than we are and we're trying to mirror what they're doing but we can possibly look at the percentage of our income compared to the total to see if we're lining up to the model that we're kind of projecting ourselves to be. So in this case I have the 4736.47 divided by the total income 10200.77 if I move the decimal two places over we get the 46.43 percent so we could do that all the way down and then of course all the percentages there would add up to the 100 percent right we got the so if we add these up we have for example the 22.06 minus the 0.88 plus the 14.48 plus 22.02 plus 23.06 plus the 4.35 plus I'm going down to here the 2.45 plus 0.49 plus and then we're going here the 1.08 plus the 8.95 plus 4.94 and that's going to give us our 100 percent so that makes sense but then down below you might say well why would it make sense for the expenses to be divided by the income and once again it's kind of because the income is the reason that we have the expenses the expense