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Comparative Statement Analysis

Comparative Statement Analysis:

Comparative statement analysis is an analysis of financial statement at different period of
time. This statement helps to understand the comparative position of financial and
operational performance at different period of time.
Comparative financial statements again classified into two major parts such as
comparative balance sheet analysis and comparative profit and loss account analysis.

Comparative Statement Analysis
[Post Image Courtesy of Renjith Krishnan at FreeDigitalPhotos.net]

Comparative Balance Sheet Analysis:

Comparative balance sheet analysis concentrates only the balance sheet of the concern at
different period of time. Under this analysis the balance sheets are compared with previous
year’s figures or one-year balance sheet figures are compared with other years. Comparative
balance sheet analysis may be horizontal or vertical basis. This type of analysis helps to
understand the real financial position of the concern as well as how the assets, liabilities
and capitals are placed during a particular period.

Comparative Profit and Loss Account Analysis:

Another comparative financial statement analysis is comparative profit and loss account
analysis. Under this analysis, only profit and loss account is taken to compare with previous
year’s figure or compare within the statement. This analysis helps to understand the
operational performance of the business concern in a given period. It may be analyzed on
horizontal basis or vertical basis.

About Author Mohamed Abu 'l-Gharaniq

when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries.

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