How To Do Vertical, Horizontal And Ratio Analysis For A Shark Tank Investor Report

Quick answer: For a Shark Tank style investor report, build three layers in order. Start with vertical analysis to show the structure of the statements, add horizontal analysis to show direction over three years, then use a short set of ratios to explain why the numbers moved. Finish with a clear invest or do-not-invest call backed by two or three of those numbers.

This guide is for RMIT Financial Accounting and Statement Analysis students who have been allocated a listed company and must produce a report, a formula-driven spreadsheet and a pitch deck. It follows the pattern of our live Shark Tank investor report question, and every worked number comes from the illustrative Shark Tank financial statement analysis sample, which is for reference only.

If you would rather have a specialist check your plan, our financial statement analysis service is there for that.

What does the Shark Tank investor report actually ask for?

Three deliverables, and students tend to treat them as one. The report is short, around 1,000 words, so it cannot hold everything. The spreadsheet has to show working through visible formulas. The slides need a script, which means you are speaking to an investor, not reading a table aloud.

The data comes from the library database your course names, usually four years of balance sheet and income statement for your allocated company. You analyse three years and keep the earliest as the base year for movement. That is why a fourth year is downloaded: so year-one growth can be calculated.

The audience matters. A Shark Tank investor wants to know three things quickly: is the business growing, is it profitable, and could it get into trouble. Build everything around those questions.

Where the marks are

The brief lists the report sections, so the marking will follow them. The table below is our reading of where effort pays off. The emphasis column is illustrative, not an official mark split, so check your own assessment guide.

How to do vertical, horizontal and ratio analysis step by step

Do the work in this order. Each step feeds the next, and the spreadsheet can be built as you go.

1. Download four years of income statement and balance sheet data, and check that totals reconcile (assets equal liabilities plus equity).
2. Create one sheet with years in columns and line items in rows. Keep the same layout for the company and its competitor.
3. Run vertical analysis: income statement lines as a percentage of revenue, balance sheet lines as a percentage of total assets.
4. Run horizontal analysis: year-on-year change for each line, and an index against the base year.
5. Calculate the ratio set in the next section for all three years and for the competitor.
6. Write one sentence of meaning for every table, naming the cause where the annual report gives one.
7. Choose three charts, build the slides, and write the script last.
8. Draft the recommendation, then cut the report to the word limit.

Here is the logic with our fictional Company X. Revenue grew 10.4% then 7.0%, but net profit grew 16.5% then 15.7%. Vertical analysis shows why: gross margin widened from 40.0% to 42.0% while operating expenses stayed at 25.0% of revenue. Horizontal and vertical analysis together tell one story. Either alone does not.

Which ratios belong in the report? A cheat-sheet

The brief asks for financial health, so cover four groups and keep two or three ratios in each. Do not add ratios just because the database offers them. Our sample uses ten, which is plenty for a 1,000-word report. Ratio definitions vary between textbooks (Subramanyam 2014), so state yours and apply it consistently.

Whichever base you use (closing or average balances), say so once and stick to it. Markers notice inconsistency faster than they notice a different formula.

Which charts suit which analysis?

The brief mentions bar, pie and line charts, and each has a job. Pick one per message and label the axis and unit.

Avoid pie charts with more than five slices, and never use a chart to repeat a table in the same slide. In our fictional example the strongest slide pairs a bar chart of quick ratio with receivable days, because together they explain a liquidity risk in one glance.

Excel tips for formulas the marker can follow

The spreadsheet is marked on whether formulas show, so avoid pasting values. Use one formula per row type and copy it across. A few habits save a lot of rework:

• Lock the base with dollar signs: =B6/B$5 for vertical analysis, so the revenue row stays fixed when you copy down.
• Calculate growth as =(C5-B5)/B5 and format it as a percentage.
• Put the competitor on the same sheet with identical row labels, so comparison formulas are one reference away.
• Label units (millions or thousands) at the top and use one unit throughout.
• Use Show Formulas, or add a column with the formula text, when you take screenshots for the report.

If the spreadsheet is your weakest piece, see our finance assignment help for model-answer support on the modelling side.

What students struggle with

From the questions we see on this type of task, the same worries come up repeatedly.

“I have all the numbers but no story.” The usual fix is to begin with the conclusion you suspect (growing, profitable, stretched) and test it with the tables. If the numbers disagree, change the story.

“What counts as a good ratio?” There is no universal number. Compare with the competitor and with the company’s own trend, then say why the gap exists. A current ratio of 1.63 means little until you see the peer at 1.90 (illustrative).

“1,000 words is not enough.” It is enough if tables carry the figures and the text carries only interpretation. Put full workings in the spreadsheet.

“The database export is messy.” Line items are sometimes labelled differently across years. Map them once, note any reclassification, and check the totals against the annual report, whose presentation follows AASB 101 (AASB n.d.).

“Which competitor should I use?” Choose a listed firm in the same industry and of broadly similar size, and explain the choice in one sentence.

Common mistakes in a financial statement analysis report

• Describing numbers without explaining them (“revenue rose 7%”) and never saying why it matters.
• Mixing base years, or using average balances for some ratios and closing balances for others.
• Reading ROE without checking leverage. A high ROE with rising debt is a different message from a high ROE with falling debt.
• Treating one year as a trend. Three years is the minimum for a direction.
• Ending without a decision. A Shark Tank pitch that finishes with “it depends” will lose the room.
• Skipping the risk. Honest investors expect one clear risk, and the best reports quantify it.

Checklist before you submit

• Report has the five required sections and stays within the word limit.
• Every table and chart has a title, units and a sentence of interpretation.
• Ratios show formula, three years and a competitor comparison.
• Spreadsheet formulas are live and the years are labelled.
• The recommendation names two or three numbers as evidence and one risk.
• Slides carry one message each, and the script is written for speaking.
• Harvard in-text citations match the reference list, and the data source is cited.
• Your own company’s figures are used throughout. Nothing is copied from the sample.

Want a worked structure to compare against? Our report writing help covers layout and polish for a short analytical report, and the accounting assignment help page explains how our specialists support accounting coursework.

Frequently asked questions

How many years should I analyse for the Shark Tank report?

Analyse the three most recent years, using the fourth downloaded year as the base for the first year-on-year change. This gives two growth figures per line and a visible direction without overloading a 1,000-word report.

What is the difference between vertical and horizontal analysis?

Vertical analysis shows each line as a percentage of a base in the same year, such as revenue or total assets. Horizontal analysis compares the same line across years. Vertical analysis shows structure, while horizontal shows movement.

Which ratios should I include if I only have 1,000 words?

Choose two or three from each group: liquidity, profitability, efficiency and solvency. Put the full list in the spreadsheet, and discuss only the ones that support your recommendation in the report.

Do I need a competitor in the spreadsheet?

Yes, because the brief asks for competitor comparison. Without a peer, a ratio has no benchmark, and your interpretation becomes opinion. Pick a listed company in the same industry and apply identical formulas.

How should I present the recommendation?

State the decision in the first sentence, give two or three figures as evidence, name one risk and say what would change your mind. Keep it to a short paragraph in the report and one slide in the deck.

Can I use the sample’s figures in my own report?

No. The sample uses a fictional company with illustrative numbers and exists to show structure. Your report must use your allocated company’s real data and your own analysis, in line with your university’s academic integrity rules.

Once your tables are built, a second pair of eyes helps most on the interpretation. You can send your draft through our assignment support request page, and see what we do and do not cover in our warranty policy.

About the expert

Guidance for this article draws on the accounting expertise of Bryan Chen, who holds a Ph.D. in Accounting from the SMU School of Accountancy.