 QuickBooks Online 2022 balance sheet vertical analysis. Get ready because it's go time with QuickBooks Online 2022. Online in our browser searching for QuickBooks Online test drive going into the test drive. We're going to be selecting the United States version of it and verifying that we're not a robot. Sample company Craig's design and landscaping services holding control scrolling up just a bit to get to that one to 5%. We're also going to have the free 30 day trial version over open just so we can take a look at the business view as well as the accounting view. If you don't have access to this yet, that's okay. We're going to be using it more in the second half of the course back to the sample file. We're going to be opening up two tabs that we can put reports into by doing so we're going to go to the tab up top right click on it and duplicate that tab go to this tab to the left again same process right clicking on it duplicating it as those two are thinking I'm going to go back to the 30 day free trial version just to note where the reports are in the business view which is in the business overview section at this time and then in the reports right here if you were to go to the drop-down in the cog and switch to the accounting view then it would look much like what we're going to be looking at here in the Larry landscaping or the Craigs design and landscaping sample company file so back in the sample company file we're on the second tab and here in the accounting view we got the reports on the left hand side we're going to start out with our balance sheet report once again and then I'm going to go to the tab on the right and we're going to be going to the reports and open up our P&L profit and loss report but before we do I just want to note that we're going to be looking at another type of balance sheet we saw that there's a comparative balance sheet here a balance sheet detail report and a balance sheet summary report doesn't look like they have a vertical analysis type of default report but it's possible that QuickBooks can put in some of these default reports that we're going to be constructing however if you learn to construct them using the tools that are given you have a lot more flexibility in terms of the kinds of reports that you can put together from the basic standard financial statement reports balance sheet and income statement or profit and loss I'm now going to open up the P&L the profit and loss let's do a range change up top from 010121 to 123121 on the P&L run it close the hamburger and then go back to the tab on the left hand side where our balance sheet was at we're going to close the hamburger there as well do a range change up top we're going to say 010121 to 123121 run it now last time we did a comparison of a side by side or horizontal comparison lining up two different time periods and possibly taking the difference and the change between the two now we're going to do a vertical type of analysis noting that this report on the balance sheet shows us where we stand as of a point in time assets that we have liabilities that we owe to third parties the equity which you can think about as kind of the net value towards the owners of the company assets equal liabilities plus equity now we can't compare this as much to another company that we might be benchmarking to due to the fact that they might have higher dollar amounts than we do however we can use our ratios to try to make comparisons so this would be similar especially if you concentrate in the asset section where we have the total assets these are the assets that we're going to use within the business in order to help us generate revenue in the future and we might try to break that out in a similar fashion as you might compare like an investment type of account if you are comparing to a very crafty investor like a Warren Buffett or something obviously you cannot come you cannot compare the dollar amounts of how much you have invested to what they have invested or he has invested however you can try to look at the portfolio and say what percentage do they have invested in this type of asset that type of asset and so on and so forth and we could do a similar kind of thing here we could say okay if I'm looking at a very large company that does what we do landscaping in this case they make more money than we do we can't really compare our total basically assets and liability categories but what we can do is try to say what is the comparative of say cash to total assets what's the comparison of accounts receivable to total assets the way to do that we're going to just adjust our standard balance sheet report going up top we're going to select the period drop down here and instead of having the previous period or previous year as we did last time we're going to do the percent of the column percent of the column and then we're going to run it and so on the balance sheet side of things or on the asset side of things we're comparing everything to the bottom line that being total assets on the liability and equity side of things we're comparing everything to the bottom line for the accounting equation which is basically liabilities and equity so you can see the bottom line here 100% and the end of the total assets are at the 100% so let's pull up the trustee calculator and do a do a few calculations on this one so if we pull up the trustee calculator can I make it any smaller it's still kind of big I'll put fit it inside this the margins so we're going to go up top on the checking account we're going to say that we have this 2101 divided by the total assets that we have down below the 24336.29 and say that if we multiply that times 100 and now I got to make it a little wider it's too skinny now 8.6 so 8.6 percent that we have there so once again if I was to compare this to another company and say well what's their cash in relation to their total assets then it might give me some information that is relevant if I look at the percentage as opposed to just looking at the dollar amounts so we can do that on accounts receivable where of course we can take the 5281.52 divide that by the total assets down below which is 24336.29 and multiply that times 100 let's say and once again it's too skinny too skinny 21.7% so we could say the accounts receivable is 21.7% of total assets and this could give us some some idea that could be actionable when benchmarking we can look at the liabilities and equity and we're going to compare that to the bottom line of liabilities and equity which is equal to assets due to the accounting equation so accounts payable for example we can take the 1602.67 divided by the total liabilities and equity which is also 24336.29 and multiply that times 100 and it's still too skinny again there goes 6.5% on the AP rounded of course we could take an equity line item like like the opening balance equity let's take even though that's a kind of a funny account there notice that net income would roll into the retained earnings so we could that net income in essence is retained earnings at this point so we could let's take the total equity the total equity is actually negative of the 7661.04 divided by the 24336.29 and that's going to give us if we multiply it times 100 the 31.48479948 about so there's our vertical type of analysis so let's scroll back up top and we might then do a little bit of formatting to it whenever you're thinking about the formatting you're probably thinking am I using this report for internal purposes for decision-making purposes how do I want it formatted in that instance and am I putting this together for external purposes and how do I want it formatted in that instance notice here just with the balance sheet report we looked at comparative reports of which we could have many we can compare multiple months we can pair three months in a quarter we can have a quarterly comparison we can have two period comparisons comparing to the current period to the prior month current month to the prior month we can do that same thing for the quarter we could compare the current month to the prior year so a bunch of different comparative reports we can look at and now we've got the vertical analysis report that we can look at so your question that is going to be what do we want to be presenting on a monthly basis on a quarterly basis on a yearly basis possibly to clients or supervisors I'm typically going to be thinking of clients here and how are we going to present that to them so that we can show them a lot you know that we're doing the work here and present it well to them and not kind of overwhelm them at the same time so a lot of times you might want to then take off the pennies of the reports maybe and we might want to change the name of the report now that we have a kind of comparative type of report and we might want to put bracketed numbers as negatives that's been our standard take off the footer so let's go up here and say let's do some some formatting and say let's call this a balance sheet let's call it vertical vertical analysis I hope I spelled that right it didn't give me any red dots I think it does give you red things if you spelled it wrong it has a spell check in other words which isn't foolproof but we're gonna we're gonna keep it at that and then we can go to our item up top and we can do some customizations our standard customization spend let's take off the pennies cleaning it up that way let's make some brackets around the negative numbers and make them red so they pop out and then let's go down to the headers and footers and take that thing off the footer which is going to be the date prepared time prepared report basis down at the bottom of the report don't need that stuff we're gonna clean that off we're gonna say run that report so now we've got our balance sheet looks good and so it's a balance sheet vertical analysis we've got our percentages on the right hand side we remove the pennies we got that negative numbers bracketed and read we've got no footer on down below if we were to take a look at a print preview of this preview the printing por favor then we've got this is what it looks like so that looks looks pretty good no footer down there okay so in future presentations we're going to also try to think about how to memorize this report so that we don't have to keep putting it together every time we want to possibly display this at the end of the month or the end of the year we could just change the dates we're also going to be thinking about how to give it to say a client or supervisor possibly by printing it or saving it as a PDF for emailing we can obviously email it but there are limitations with the email because if you have multiple reports that you're going to be given you don't want to give multiple like 10 different emails you can group them together by putting them into a zip file which we'll talk about and we also could export them to excel and we can use excel in conjunction with a cute a PDF printer of some kind to basically put all the reports on one PDF report and you can also if you export them to excel do a little bit more formatting if you wanted to do more formatting in excel as well so we'll talk about those items when we get into the printing of the reports in future presentations