A Comparative Financial Statement analysis gives data to assess the direction of change in the business. A financial statement generally shows the financial health of a business for a particular accounting period, whereas the top-level management needs to know the condition and the direction of the business whether it is favourable or not. For this, comparing the figures for the current year and the previous years has to be analyzed. For better forecasting, the comparative statement is prepared and analyzed. It is also referred to as Horizontal analysis. This enables the identification of major developments and weaknesses. There are several types of comparative statement analysis but the distinguished four types are individualizing, universalizing, variation-finding, and encompassing.