What is comparative statements?

Comparative statement or comparative financial statement means the comparison of components or elements or items of balance sheet and statement of profit and loss for two or more years. The value of which component or element or items of two or more financial year is place alongside each others thereafter difference between the two amount is determined. And then the percentage change in the amount from the base year is determined. The statements of prepared is known as comparative statement. Comparative statement is a tool of financial analysis that show change in each item from the base year in absolute amount and percentage taking the amount for the preceding that is previous accounting period as a base.