Comparative statements

A comparative statement puts two years' figures side by side and shows the change. Its columns:

• the item;
• the first (earlier) year;
• the second (later) year;
• absolute change = second year − first year (a plus sign for an increase, minus for a decrease);
• percentage change = absolute change ÷ first year × 100.

The percentage is always worked out on the earlier (base) year's figure.

Example: revenue rises from 40,00,000 to 50,00,000. Absolute change 10,00,000; percentage change 10,00,000 ÷ 40,00,000 × 100 = +25%. If expenses fall from 8,00,000 to 6,00,000, that is −2,00,000, or −25%.

Both years must follow the same accounting principles; if a policy changed, a footnote must say so, or the comparison misleads.

Then read the story behind the figures: did revenue grow faster than expenses? Did borrowings grow faster than assets? Comparative statements show the trend and direction of change.