What is Comparative Analysis?

Analyzing annually financial statement data provides you an opinion about company. However, for knowing and evaluating company well, changes on financial statements must be overviewed year by year. For this, absolute numbers on company’s balance-sheets and income statements which are belong to more than one periods must be compared.

How can you interpret Comparative Analysis?

Comparative analyses shows that financial structure of company in selected periods. Displaying financial structure of company comparatively, provides company’s movement on results of its operations in time to appear. Comparative analyses must be evaluated with change analyses. Some difficulties can occur during comparison of absolute numbers on financial statements which belong to more than two years. Reading absolute numbers of all items, evaluating difference numbers and sizes of increasings-decreasings, establishing significant relationships by making a comparison among items with this way can be so difficult. Because of this, comparative boards must be used with change analyses.

Reporting Comparative Analyses