Comparative statements, also known as horizontal analysis, are financial statements that compare the financial data of a company over a specific period of time. This type of analysis helps in identifying trends, patterns, and changes in the financial performance of a company.

Comparative statements are an essential tool for financial analysis as they provide valuable insights into the company's financial health and performance. By comparing financial data from different periods, analysts can understand how the company has performed over time and identify areas of improvement or concern.

Let's break down the explanation further:

1. What are comparative statements?
Comparative statements are financial statements that present financial data for multiple periods side by side. They typically include the income statement, balance sheet, and cash flow statement. These statements allow for a year-on-year or quarter-on-quarter comparison of financial data.

2. Purpose of comparative statements
The main purpose of comparative statements is to analyze the financial performance of a company over time. By comparing the financial data from different periods, analysts can identify trends, patterns, and changes in key financial indicators. This analysis helps in evaluating the company's financial health and performance.

3. Benefits of comparative statements
Comparative statements provide several benefits for financial analysis. Some of the key benefits include:

- Identifying trends: Comparative statements help in identifying trends in the company's financial performance. For example, they can show whether the company's revenue is increasing or decreasing over time.

- Comparing performance: By comparing financial data from different periods, analysts can assess the company's performance and identify areas of improvement or concern. For example, they can compare the company's profitability or liquidity ratios over time.

- Assessing financial health: Comparative statements help in assessing the financial health of a company. By comparing key financial indicators, analysts can determine whether the company is financially stable or facing any challenges.

- Making informed decisions: Comparative statements provide valuable insights that can help in making informed financial decisions. For example, they can assist in evaluating the feasibility of a new investment or assessing the impact of a strategic decision on the company's financial performance.

In conclusion, comparative statements, also known as horizontal analysis, are financial statements that compare the financial data of a company over different periods. They provide valuable insights into the company's financial performance, trends, and changes, helping in assessing its financial health and making informed decisions.