Supreme Objectives Of Comparative Statement

This analysis detects changes in a companys performance and highlights trends.

Objectives of comparative statement. The comparative financial statement helps to ascertain the trend relating to sales cost of goods sold operating expenses etc. The calculation of dollar changes or percentage changes in the statement items or totals is horizontal analysis. A To make the data simpler and understandable B To indicate the trend C To help in forecasting D All of the Above.

To indicate the trend cTo help in forecasting d. Financial analysts and managers use these financial statements to analyze the companys activities over the period. Should the investor buy stocks.

Lets say a company make 100 million a year what do you think. This analysis detects changes in a companys performance and highlights trends. Comparative financial statements are the complete set of financial statements that an entity issues revealing information for more than one reporting periodThe financial statements that may be included in this package are.

See full answer below. So that a proper comparison can easily be made which helps the analyst to understand the overall performance of a firm. Income statements provide the details about the results of the operations of the business and comparative income statements provide the progress made by the business over a period of a few years.

Information is not meaningful without comparison. The main objective in comparative analysis is to help investors make decisions as to their capital allocation eg. This is especially useful when companies are in the same industry but very different in size.

Objectives of comparative financial statements. To reveal qualitative information about the firm in terms of solvency liquidity profitability and so on are extracted from the analysis of financial statements. A To making data simple b To make data comparative c To help in forcasting d To detect financial irregularities.