er 14 Describe comparative financial statements Perform and evaluate trend analysis (horizontal analysis) Perform and evaluate common-size analysis (aka vertical analysis and component percentages) Identify, compute, and analyze key indicators of liquidity, solvency, profitability, and mana efficiency
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A comparative financial statement is a document used to compare a particular financial statement with prior period statements. Previous financials are presented alongside the latest figures in side-by-side columns, enabling investors to identify trends, track a company's progress and compare it with industry rivals.
Analysts, investors and business managers use a company's income statement, balance sheet, and cash flow statement for comparative purposes. They want to see how much is spent chasing revenues from one period to the next and how items on the balance sheet and movements of cash vary over time.
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