What Are Comparative Financial Statements?

Comparative financial statements are financial statements that reflect changes in the financial position of the two dates. These include: a comparative balance sheet, a comparative income statement, and a comparative retained income statement. This type of financial statement can be used for trend analysis of the financial situation, that is, based on the financial statement data of successive periods, the current increase and decrease directions and ranges are compared to reveal the changes and trends in finance and business. Comparative financial statements can be prepared in two ways: absolute or relative. The absolute number method is divided into two types: first, only the statement amount of consecutive periods is listed; second, an "increase and decrease" column is added to the report to reflect the comparison results. The relative number method is also divided into two types: one is the longitudinal analysis and preparation; the other is the horizontal analysis and preparation. Vertical analysis takes the number of an item on the report as 100%, and calculates the percentage of the remaining items arranged vertically. Horizontal analysis is the horizontal comparison of the same items on the financial statements before and after. Comparing financial statements can only explain the results of changes between periods, but not enough to explain the reasons for changes in financial conditions. ^[1]

Compare financial statements

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Comparative financial statements are financial statements that reflect changes in the financial position of the two dates. These include: a comparative balance sheet, a comparative income statement, and a comparative retained income statement. This type of financial statement can be used for trend analysis of the financial situation, that is, based on the financial statement data of successive periods, the current increase and decrease directions and ranges are compared to reveal the changes and trends in finance and business. Comparative financial statements can be prepared in two ways: absolute or relative. The absolute number method is divided into two types: first, only the statement amount of consecutive periods is listed; second, an "increase and decrease" column is added to the report to reflect the comparison results. The relative number method is also divided into two types: one is the longitudinal analysis and preparation; the other is the horizontal analysis and preparation. Vertical analysis takes the number of an item on the report as 100%, and calculates the percentage of the remaining items arranged vertically. Horizontal analysis is the horizontal comparison of the same items on the financial statements before and after. Comparing financial statements can only explain the results of changes between periods, but not enough to explain the reasons for changes in financial conditions. ^[1]

The comparative financial statement is to report the data for the same period at the same time as the current period of the report for investors to analyze and compare. All reports submitted by enterprises in China are comparable, unless there is no relevant data.