As the name indicates a comparative balance sheet is a balance sheet that provides side by side information of a business’s assets, liabilities and shareholder equity multiply in the same time. For example a comparative balance sheet that is to be published at the end of an accounting year will present the comparative information of past three accounting years of the business. The aim of a comparative balance sheet is to provide reader a snap shot of the financial condition of the business in comparison to each other over the time. In most of the companies comparative balance sheet is used to build a trend line for future.
As far as accounting standards are concerned GAAP don’t require comparative balance sheet from a publically held company or a company that is tagged as non-profit entity. However a comparative balance sheet is required by SEC even for publically held companies in a number of circumstances.
Comparative balance sheet can be made by using any format as there is no standard format of a comparative balance sheet. An example of a comparative balance sheet can be shown as under:-
|
as of 12/31/20X3 |
as of 12/31/20X2 |
as of 12/31/20X1 |
|
| Current assets | |||
| Cash | $1,200,000 | $900,000 | $750,000 |
| Accounts receivable | 4,800,000 | 3,600,000 | 3,000,000 |
| Inventory | 3,600,000 | 2,700,000 | 2,300,000 |
| Total current assets | $9,600,000 | $7,200,000 | $6,050,000 |
| Total fixed assets | 6,200,000 | 5,500,000 | 5,000,000 |
| Total Assets | $15,800,000 | $12,700,000 | $11,050,000 |
| Current liabilities | |||
| Accounts payable | $2,400,000 | $1,800,000 | $1,500,000 |
| Accrued expenses | 480,000 | 360,000 | 300,000 |
| Short-term debt | 800,000 | 600,000 | 400,000 |
| Total current liabilities | $3,680,000 | $2,760,000 | $2,200,000 |
| Long-term debt | 9,020,000 | 7,740,000 | 7,350,000 |
| Total liabilities | 12,700,000 | 10,500,000 | 9,550,000 |
| Shareholders’ equity | 3,100,000 | 2,200,000 | 1,500,000 |
| Total liabilities and equity | $15,800,000 | $12,700,000 | $11,050,000 |