Question

What is comparative statement of profit & loss? How is it prepared?

Answer 1

A comparative statement of profit & loss shows the figures of revenue from operations, expenses, incomes, and net profit or loss for multiple years side by side. It helps to identify the changes in absolute terms and percentages over the years.

It is prepared by listing the figures of two or more years in columns, calculating the absolute increase or decrease for each item (current year figure minus previous year figure), and then calculating the percentage change based on the previous year’s figure. This provides a clear comparison of financial performance across years.