| Basis of Difference | Horizontal Analysis | Vertical Analysis |
| Meaning | If refers to the comparison of and item of the financial statement of one ** of periods to its corresponding item of the base accounting ** | If refers to the comparison of item -items of the financial statement to the common item of the same accounting ** |
| Purpose | Its purpose is to determine the change in an item during an account **. The change in the item is expressed either in absolute figure or in percentage or in both terms | Its purpose is to determine the proportion item/items to the common item of the same account **. the change in the item is expressed either in ration or in percentage terms. |
| Usefulness | It indicates growth or decline of the item | It helps in predicting and determining the future relative proportion of an item to the common item. |
