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Format of Comparative Statement

A comparative balance sheet analyzes and compares the assets and liabilities of a business over multiple accounting periods to show changes over time. It provides the current financial and liquidity position as well as long-term financial position and profitability by comparing values and calculating percentage changes between periods. To prepare a comparative balance sheet, absolute values for assets and liabilities are determined for each period and absolute and percentage changes between periods are calculated.

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2K views3 pages

Format of Comparative Statement

A comparative balance sheet analyzes and compares the assets and liabilities of a business over multiple accounting periods to show changes over time. It provides the current financial and liquidity position as well as long-term financial position and profitability by comparing values and calculating percentage changes between periods. To prepare a comparative balance sheet, absolute values for assets and liabilities are determined for each period and absolute and percentage changes between periods are calculated.

Uploaded by

priyanka
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Format of Comparative Statement:-

Comparative Balance Sheet:-

Comparative balance sheet analyses the assets and liabilities


of business for the current year and also compares the increase
or decrease in them in relative as well as absolute parameters.

A comparative balance sheet not only provides the state of


assets and liabilities in different time periods, but it also
provides the changes that have taken place in individual assets
and liabilities over different accounting periods.

The following points should be studied when analysing a


comparative balance sheet.

1. The present financial and liquidity position (study working


capital).

2. The financial position of the business in the long term.

3. The profitability of the business.

Steps in preparing a comparative balance sheet

The below steps can be followed

1. Determine the absolute value of assets and liabilities related


to the accounting periods.

2. Determine absolute changes in the items of the balance


sheet relative to the accounting periods in question.

3. Calculate the percentage change in assets and liabilities by


comparing current year values with values of previous
accounting periods.
The format of a comparative balance sheet is as follows:

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