F3.
What is the advantage of using comparative statements for financial analysis rather than statements for a single date or period? A comparative statement is used to compare differences between a financial statement and previous statements from years before. The data is taken and compared to see the company's progress with time, but also to be able to analyze that data side to side with any rivals the company has in the industry. An advantage of using comparative statements for financial analysis rather than statements for a single date or period is that we can see the major changes that have happened throughout the years and not just focus on one year only. Another advantage is being able to use trend analysis to analyze consistent patterns throughout time with a specific account, like percentages that had been reported every year for that account. For example, if a company has sold goods and their percentage changes from fifty percent to a higher percentage as years go by, then the company can analyze that and makes changes if they have to.
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