Why is it so important to compare a firms current financial statements with those of previous years,

Question:

Why is it so important to compare a firm’s current with those of previous years, those of competitors, and the average of all firms in the industry in which the firm operates?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...