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Definition

The Companies Act (71 of 2008) requires that companies provide comparative figures when reporting their financial results. This usually takes the form of a second column of figures in the income statement, balance sheet and other reports showing the previous period's figures for comparison. Some companies include a third column showing the percentage change from one period to the other. As a private investor it is always useful to look at the previous period's figures and see how they have changed. This will give you a good idea of what is happening in the business. For example, if the company's income rises by less than the going inflation rate, then you know that its sales are going down in real terms.

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