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Chapter 4. Comparative Balance Sheets an... > Reasons for Comparative Analysis

4.1. Reasons for Comparative Analysis

In its simplest form, a comparative financial statement merely shows you two, or occasionally three, periods of financial data so you can compare across time periods the results of doing business. In theory, the periods could represent anything from days to decades, but in practice people usually look at years or quarters. Of course, both periods should be of the same duration, so you would compare Year 3 with Year 4, or Quarter 1 with Quarter 2.

If it's year-end and you want to compare last year's income statement with this year's, it seems that the thing to do is to use QuickBooks reports to print a couple of income statements. The dates would be January 1 through December 31 for each year. Then just look at them and see what's changed.


  

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