Question -
Answer -
Comparative statements have the following importance:
1. It presents financial data in a simple form, with year wise data being presented in side by side fashion making the presentation neat and enabling intra and inter-firm comparisons more conclusive.
2. Presentation is very effective for drawing insights quickly and easily
3. It assists the management in drafting future plans and forecast trends which is acheived by analysing profitability and operating efficiency of a business over time.
4. Comparative analysis helps easy detection of problems. Early detection helps take corrective measures and align the business in meeting the desired target.