Practicing Success
Practicing Success
CUET Preparation Today
| Which one among the following is the most useful form of horizontal analysis in making a comparative study for the financial statement for a number of years? |
Trend Analysis Comparative statement Cash flow statement Common size Statement |
| Comparative statement |
| Comparative Statements: These are the statements showing the profitability and financial position of a firm for different periods of time in a comparative form to give an idea about the position of two or more periods. It usually applies to the two important financial statements, namely, balance sheet and statement of profit and loss prepared in a comparative form. The financial data will be comparative only when same accounting principles are used in preparing these statements. If this is not the case, the deviation in the use of accounting principles should be mentioned as a footnote. Comparative figures indicate the trend and direction of financial position and operating results. This analysis is also known as ‘horizontal analysis’. |
