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What are the benefits of using the different tools of comparative financial statement analysis? what are the main viewpoints of each tool? does it really help?​

Sagot :

Krixiacoleen07idn

Answer:

Comparative Statements

Also known as ‘horizontal analysis, are financial statements showing financial position & profitability at different periods of time. These statements give an idea of the enterprise financial position of two or more periods. Comparison of financial statements is possible only when same accounting principles are used in preparing these statements.

Tools of Financial Analysis

Financial statements are prepared to have complete information regarding assets, liabilities, equity, reserves, expenses and profit and loss of an enterprise. To analyze & interpret the financial statements, commonly used tools are comparative statements, common size statements etc.

Eudxirielleidn

Answer:

The comparative financial statement helps to ascertain the 'trend' relating to sales, cost of goods sold, operating expenses etc. so that a proper comparison can easily be made which helps the analyst to understand the overall performance of a firm.