what are some disadvantages of using comparative statements?

Expert Solution

Disadvantages of using comparative statements:-

Comparative financial statements do not present the change in various items in relation to total assets, total liabilities or net sales.
These statements are not useful in comparing financial statements of two or more business because there is no common base.
It is an analysis of historical records which provide the past trend. It is not reflective of future which is more relevant.
If Two firm follows different accounting policies then a purposeful comparison of their financial statements would not be possible.

ekkarill92 answered 2 years ago

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