A comparative balance sheet presents side-by-side information about an entity’s assets, liabilities, and shareholders’ equity as of multiple points in time. For example, a comparative balance sheet could present the balance sheet as of the end of each year for the past three years. Another variation is to present the balance sheet as of the end of each month for the past 12 months on a rolling basis. In both cases, the intent is to provide the reader with a series of snapshots of a company’s financial condition over time, which is useful for developing trend line analyses (though this works better when the reader has the entire set of financial statements to work with and not just the balance sheet).
The comparative balance sheet is not required under GAAP for a privately-held company or a nonprofit entity, but the SEC does require it in numerous circumstances for the reports issued by publicly-held companies, particularly the annual Form 10-K and the quarterly Form 10-Q. The usual SEC requirement is to report a comparative balance sheet for the past two years (with additional requirements for quarterly reporting).
There is no standard format for a comparative balance sheet. It is somewhat more common to report the balance sheet as of the least recent period furthest to the right, though the reverse is the case when you are reporting balance sheets in a trailing Twelve Months format.
Here is an example of a comparative balance sheet that contains the balance sheet as of the end of a company’s fiscal year for each of the past three years:
ABC International Statement of Financial Position
|
As of |
As of 12/31/20X2 |
As of |
|
| 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 |
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