A financial comparison means devising a statement which compares financial data from diverse periods of time. This comparative statement includes a section of the income statement, balance sheet or cash flow statement with its equivalent section from a previous period. It can also be used to compare financial data from dissimilar companies over time, thus enlightening the trend in the financials.
Financial comparison analysis template allows companies to make vital decisions about the capital investments. It also allows executives make crucial decisions about their companies. Such decisions involve the questions of continuing or discontinuing a company’s main operation or part of its business as well as decisions to purchase items in the manufacturing of its products.
Financial comparison analysis template allows businesses to:
- Plan out the necessary steps required to rent or lease types of machinery and other equipment for the production of its goods.
- Allows executives to issue stocks or convey for a bank loan to improve its working capital.
- Make vital decisions regarding investing or lending capital.
- Other minor decisions that allow the management to make an informed decision on various alternatives in the conduct of its business.
Financial comparison analysis template gives a company an incentive to make a comparison with other companies in the same industry. It will also help executives to recognize what are the weaknesses of the businesses so as to help them with future investments. It also helps to evaluate the performance of the managers and employees through graphics and illustrations. It helps to calculate taxes and then subtract them from the annual budget.
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