Comparative Analysis

Comparative analysis is a technique of comparing financial statement data from year to year or comparing with other companies or the like so that it can be analyzed further if there are changes in the income statement and balance sheet.

The balance sheet compares assets and equity over two or more periods. The profit or loss report compares the income, costs, net profit, or loss from the company’s operating results in two or more periods.

Comparative Analysis Method

Сοmрагіng fіnаnсіаl dаtа uѕuаllу uѕеѕ ѕеνегаl ѕtаndагdѕ tο mаке іt mοге сοnѕрісuοuѕ, ѕuсh аѕ іntегnаl mаnаgеmеnt ѕtаndагdѕ, hіѕtοгісаl dаtа, аnd сοmрагіѕοnѕ wіth ѕіmіlаг сοmраnіеѕ. Τhе сοmрагіѕοnѕ ехргеѕѕеd іn thе сοmрагаtіνе аnаlуѕіѕ аге dеѕсгіЬеd іn:

Αbѕοlutе Dаtа (аmοunt οf гuріаh)
Inсгеаѕе οг dесгеаѕе іn thе аmοunt οf гuріаh
Inсгеаѕе οг dесгеаѕе іn thе регсеntаgе
Сοmрагіѕοn wіth гаtіο
Регсеntаgе οf tοtаl

Two methods of Comparative Analysis:

Time series analysis compares the company’s financial data in the current period with financial data in the past period.

Cross section analysis is a method carried out by comparing the company’s financial data with other company data or industry averages.

Sample Case


The conclusion from the sample case:

Based on the table, it can be seen that sales from this year to the end year have a downward trend. It can be seen that the decline in profit was caused by immensely decreased sales so that the cost of goods sold was reduced.

When viewing the income statement above, it can be concluded that McKenzie Sales, Ltd. cannot manage finances well enough, as evidenced by the decline in sales and profits. Then McKenzie Sales, Ltd. had to decide on some changes to make the correct sales expansion to increase profit in the next year.

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