# Preparing the Vertical Financial Statement

> Source: https://help.getedara.com/en/articles/9666044-preparing-the-vertical-financial-statement · Category: Accounting › Vertical FS setup · Last updated: 2026-05-04 · العربية: https://help.getedara.com/ar/articles/9666044-%D8%A5%D8%B9%D8%AF%D8%A7%D8%AF-%D8%A7%D9%84%D8%A8%D9%8A%D8%A7%D9%86-%D8%A7%D9%84%D9%85%D8%A7%D9%84%D9%8A-%D8%A7%D9%84%D8%B1%D8%A3%D8%B3%D9%8A

Business owners need to prepare a vertical financial statement to ensure accurate financial reporting, understand the company’s financial position, and make effective decisions.

## Preparing the Vertical Financial Statement

To create the vertical financial statement in "Edara", follow these steps:

### First: Creating the Balance Sheet

1. Go to the Accounting section.
2. Open the "Vertical FS setup" page.
3. Click on " **New Section** " beside the "Chart of FS".
4. Enter a new section named "Balance Sheet" and set it to "Debit".
5. Click on **"Save"** .

![First: Creating the Balance Sheet — Click on "Save".](https://help.getedara.com/images/fin-reports/9666044/01.en.gif)

### Second: Creating the Income Statement

1. Enter a new section named "Income Statement" and set it to "Credit".
2. Click on **"Save"** .

![Second: Creating the Income Statement — Click on "Save".](https://help.getedara.com/images/fin-reports/9666044/02.en.gif)

### Third: Assigning Accounts to the Sections and Groups Created

#### Assigning Balance Sheet Accounts

1. Click on "Assets", then click on "Balance Sheet" from the “Chart of FS”, then click ▶.
2. Click on "Liabilities", then click on "Balance Sheet" from the “Chart of FS“, then click ▶.
3. Click on "Owners' equity", then click on "Balance Sheet" from the “Chart of FS”, then click ▶.

![Assigning Balance Sheet Accounts — Click on "Owners' equity", then click on "Balance Sheet" from the “Chart of FS”, then…](https://help.getedara.com/images/fin-reports/9666044/03.en.gif)

#### Creating Sections within the Income Statement

1. Select "Income Statement".
2. Click on " **New Section** ".
3. Enter the group description (First Section), and set it to "Credit"
4. Click on **"Save"** .
5. Enter the group description (Second Section), and set it to "Debit"
6. Click on **"Save"** .
7. Click on ← to return to the previous page.

![Creating Sections within the Income Statement — Click on ← to return to the previous page.](https://help.getedara.com/images/fin-reports/9666044/04.en.gif)

#### Assigning Activity Accounts to the Gross Profit Group

1. Select revenue and expense accounts related to the activity, such as (Sales Revenues – Cost of Goods Sold).
2. Click on " **First Section** " from the Income Statement in the “Chart of FS”.
3. Click ▶.

#### Assigning Other Accounts to the Profits and Losses Group

1. Select other revenue and expense accounts.
2. Click on **"Second Section"** from the Income Statement in the “Chart of FS”.
3. Click ▶.

![Assigning Other Accounts to the Profits and Losses Group — Click ▶.](https://help.getedara.com/images/fin-reports/9666044/05.en.gif)

### Fourth: Completing the Income Statement Setup

1. Click on "Income Statement".
2. Click on " **Edit** ".
3. Select ☑️ next to "Show Difference".
4. Enter “Net Profit” in the “Difference Title” field
5. Set it to " **Credit** ".
6. Choose the “Difference Location”
7. Click on **"Update"** .

![Fourth: Completing the Income Statement Setup — Click on "Update".](https://help.getedara.com/images/fin-reports/9666044/06.en.gif)

1. Click on “←” to return to the previous page.
2. Click on the “First Section”.
3. Click on " **Edit** ".
4. Select ☑️ next to "Show Difference".
5. Enter “Gross Profit” in the “Difference Title” field
6. Set it to " **Credit** ".
7. Choose the “Difference Location”
8. Click on **"Update"** .

![Fourth: Completing the Income Statement Setup — Click on "Update".](https://help.getedara.com/images/fin-reports/9666044/07.en.gif)