Difference between comparative and common size statements
Answers
Answer:
Common-size financial statements present all the financial items under their head in percentage terms. While the Comparative financial statements present the financial data for numerous years side by side. This data is to be presented in the form of absolute values, percentages, or both.
Explanation:
BRAINLIEST PLSS
Answer:
Comparative vs Common Size Statement
Comparative financial statements present financial information for several years side by side in the form of absolute values, percentages or both. Common size financial statements present all items in percentage terms where balance sheet items are presented as percentages of assets and income statement items are presented as percentages of sales.
Purpose
Comparative statements are prepared for internal decision making purpose. Common size statements prepared for reference purpose for stakeholders.
Usefulness
Comparative statements become more useful when comparing company results with previous financial years. Common size statements can be used to compare company results with similar companie