What is a comparative balance sheet?

A comparative balance sheet usually has two columns of amounts that appear to the right of the account titles or other descriptions such as Cash and Cash Equivalents, Accounts Receivable, Accounts Payable, etc. The first column of amounts contains the amounts as of a recent moment or point in time, say December31,2012. To the right will be a column containing corresponding amounts from an earlier date, such as December31,2011. The older amounts appear further from the account titles or descriptions as the older amounts are less important.Providing the amounts from an earlier date gives the reader of the balance sheet a point of reference---something to which the recent amounts can be compared. 

Comparative balance sheet helps you to compare the financial position (statement of assets & liabilities) of an organization as it stands at the end of a period. Generally such a period is a year, half yearly or quarterly.

 

You can compare the balance sheets of an org. for different periods or balance sheet of different org. within an industry.

A comparative balance sheet is an account designed to serve as a financial comparison between several accounting periods. It is useful as a business can instantly compare profits and losses between different time periods and this helps increase profits and functionality of a company.

Concept in economics that a country should specialize in producing and exporting only those goods and services which it can produce more efficiently (at lower opportunity cost) than other goods and services (which it should import). Comparative advantage results from different endowments of the factors of production (capital, land, labor) entrepreneurial skill, power resources, technology, etc. It therefore follows that free trade is beneficial to all countries, because each can gain if it specializes according to its comparative advantage. Basic concept of international trade theory, it is founded on the work of the UK economist David Ricardo () on comparative cost.