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what are the difference between common size and comparative balansheet ? explain.......... plz

Difference between a Comparative Balance Sheet and a Common-Size Balance Sheet
Comparative Balance SheetCommon-Size Balance Sheet
1.Comparative Balance Sheet of an enterprise is used to compare the assets, liabilities and capital as on two different dates.1.Common-Size Balance Sheet shows the percentage relation of each asset/liability to total assets/liabilities.
2.Objective is to show the effect of business operations on its assets, liabilities and capital.2.Objective is to analyse the changes in individual item of Balance Sheet.
3. Five Columns are there in a Comparative Balance Sheet, namely, Particulars, Previous Year, Current Year, Absolute Change, Percentage Change.3.Five Columns are there in a Common-Size Balance Sheet, namely, Particulars, Absolute Amounts (of Previous and Current Year), Percentage of Balance Sheet (of Previous and Current Year).

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comparitive is comparing 2 or more years and common size is converting all figures to a smaller figure to compare

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Common-size financial statements present all items in percentage terms. Balance sheet items are presented as percentages of assets, while income statement items are presented as percentages of sales.Comparative financial statements present financial data for several years side by side. Data may be presented in the form of absolute values, percentages or both.

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  1. Comparative Financial Statements :-

  • Comparative financial statements are also called year-to-year change statements. Comparative financial statements can use both absolute amounts and percentages to provide meaningful analysis. This type of analysis puts absolute changes and percentage changes in perspective. No changes can be computed if there is no base figure available and no meaningful change can be calculated if one figure is positive and the other is negative.

  1. Considerations:-

    Common-size financial statements are very useful when comparing financial data between different companies and especially across different industries. Because of size, currency and other differences between financial statements, it may be difficult to gauge whether a certain figure is normal, too high or too low. Common-size analysis standardizes financial statements and allows for an effective comparison.

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