Comparative financial statements
In one sentenceFinancial statements that show the current year's figures next to the previous year's figures for each item, so the reader can see the change and its causes.
Simply put
A single figure does not say much: are sales of 1,200,000 SAR good or bad? When you put last year's figure next to it, the trend appears.
International standards require comparative figures for at least the previous year. If you reclassify an item this year, reclassify it in the comparative figures too so the comparison stays fair.
Worked example
A grocery store's sales this year reached 1,200,000 SAR, compared with 1,000,000 SAR in the previous year.
Change: 1,200,000 − 1,000,000200,000 SAR
Percentage change: 200,000 ÷ 1,000,00020%
Sales growth over the previous year20%
Don't confuse it with
Horizontal analysisComparative statements are a way of presenting, while horizontal analysis calculates the change and its percentage between years.