Distinguish between a Comparative Statement and a Common-Size Statement.

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Q. Distinguish between a Comparative Statement and a Common-Size Statement.

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Basis	Comparative Statement	Common-Size Statement
What it shows	Change in each item BETWEEN two or more periods	Each item's proportion WITHIN a single period, relative to a common base
Base used	The earlier/preceding period's own figure for that item	A single common base figure for the whole statement (Revenue from Operations, or Total Assets)
Best suited for	Studying trend/direction of change over time for the SAME firm	Comparing the internal structure of TWO OR MORE firms of different sizes, or the same firm's own structure across years
Typical question answered	"By how much, and how fast, did this item change?"	"What proportion of revenue/total assets does this item represent?"
Number of periods needed	At least two	Can be prepared for even a SINGLE period on its own (though comparing several is more useful)

Q.Distinguish between a Comparative Statement and a Common-Size Statement.