Uses of comparative statement:
- These statements are very useful to the financial analysts because they indicate the direction of the movement of the financial position and performance over the years.
- These statements can also be used to compare the position of the firm every month or every quarter. They can be prepared to facilitate comparison with the financial position of other firms in the same industry or with the average performance of the entire industry. Such comparisons facilitate identification of ‘trouble spots’ in a company’s working and taking corrective measures.
- Comparative statements present a review of the past activities and their cumulative effect on the financial position of the concern.
2 Comments