Q.Explain the steps involved in preparing comparative statement.

Four steps: previous-year figures, current-year figures, absolute change, and percentage change.

Steps in preparing a comparative statement (TN HSC Class-12 Accountancy — Financial Statement Analysis):

1. Column 1 — Base-year (previous year) figures: Enter each item of the financial statement for the earlier/base year.

2. Column 2 — Current-year figures: Enter the corresponding figures for the current year.

3. Column 3 — Absolute change: Find the increase or decrease for each item.

   Absolute change = Current-year figure − Base-year figure. A positive value is an increase; a negative value is a decrease.

4. Column 4 — Percentage change: Express the absolute change as a percentage of the base-year figure.

   Percentage change = (Absolute change ÷ Base-year figure) × 100.

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