Comparative Financial Statements are statements showing the profitability and financial position of a firm for different periods of time in a comparative form. These statements give an idea about the position of two or more periods and usually apply to the Balance Sheet and Statement of Profit and Loss.

These statements provide columns for figures of both the current year and the previous year, along with changes during the year in both absolute and relative terms. This helps in identifying the direction of changes and trends in different indicators of performance.

Comparative figures indicate the trend and direction of financial position and operating results. This analysis is also known as 'horizontal analysis'.