Difference between comparative statements and common size statements
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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.
The comparative statement compares current year’s financial statement with prior period statements by listing results side by side. Analyst and business managers use the income statement, balance sheet and cash flow statement for comparative purposes. These are mainly prepared for internal decision-making purposes to be analysed by the management.
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