How to compare company accounts year on year
Why compare accounts across years?
One balance sheet is a snapshot on a single date; three or more show which way the company is heading. Modest net assets growing every year usually beat larger ones that have halved in two years.
Trend analysis matters most for small companies, because their filings publish so little else. On 1 October 2026, 32.4% of active UK companies last filed micro-entity accounts and 23.8% total exemption full accounts (accounts type study). For most of them, the balance sheet trend is the main financial evidence on the public record.
Key facts:
- For every item in the balance sheet or profit and loss account of a small company, the corresponding amount for the immediately preceding financial year must also be shown (SI 2008/409, Schedule 1, paragraph 7).
- If the prior year figure is not comparable, it may be adjusted, with particulars of the non-comparability and the adjustment given in the notes (same paragraph).
- An accounting reference period cannot be extended beyond 18 months, and an extension generally cannot be made less than five years after the end of an earlier extended period (Companies Act 2006, s.392).
- Amended accounts must say clearly that they replace the original accounts, and the original accounts stay on the register (GOV.UK).
Which lines to track
Track the same lines every year so the comparison is like for like. Almost every filing has them, including most micro-entity balance sheets.
| Line | Why it matters | What a bad trend looks like |
|---|---|---|
| Net assets | The owners' stake on paper; see net assets | Falling for three years running |
| Cash at bank | The most liquid asset and the hardest to dress up | A sharp drop while creditors rise |
| Current assets | Stock, debtors and cash together | Growing debtors with falling cash |
| Creditors due within one year | What must be paid in the next 12 months | Growing faster than current assets |
| Net current assets | Current assets minus short-term creditors | Turning negative |
| Total assets less current liabilities | Capital employed before long-term debt; see the glossary entry | Falling towards zero |
| Average employees | Size signal when turnover is missing (Companies Act 2006, s.411) | Shrinking headcount with rising creditors |
Our guide on how to read company accounts explains each line and how they add up.
Use the prior year column
Every set of small company accounts shows the previous year next to the current year, so the latest filing gives you two years and the filing from two years earlier gives you two more.
Use the prior year column carefully:
- Check the column header and date. The current year is usually the left-hand figure column; the right-hand column is last year.
- Prefer the latest version of a figure. If the prior year column in this year's accounts differs from the current year column in last year's accounts, the figure has been changed. Use the newer one and read the notes to find out why.
- Do not double count. When you build a table, take each year once, from the most recent filing that shows it.
Restated figures
A restated figure is a prior year amount changed since it was first filed. The rules allow this where figures are not comparable, as long as the notes explain it. A restatement can be a harmless reclassification or the correction of a serious error, so read the note.
Year end changes and amended accounts
A change of year end or a replacement filing can make a year on year table misleading.
Short and long periods
A company can shorten or extend its accounting reference period by notice to Companies House. An extended period cannot exceed 18 months, and extensions are generally limited to one in five years, with exceptions such as aligning with a group company or being in administration (s.392). Shortening is currently unrestricted, but GOV.UK says that from 1 April 2028 a company will need to give a business reason to shorten more than once in five years.
Balance sheet lines stay comparable across periods of different length because they are snapshots on a date. Profit and turnover do not: a 15 month profit is not comparable with a 12 month one. A year end that keeps moving deserves a question in its own right.
Amended accounts
Amended accounts replace the original filing and must say so, usually with "amended" on the front. The original stays on the register, so you may find two sets for one year. Use the amended version; the lines that changed show what went wrong the first time.
Why micro-entity accounts limit trend analysis
Micro-entity accounts let you track the balance sheet shape, but little else. A micro-entity can send only its balance sheet with less information, and small companies may choose not to file the profit and loss account (GOV.UK).
In practice that means:
- no turnover or profit trend, so you cannot tell growth from shrinkage directly;
- often no split between cash and other current assets in the shortest formats;
- no breakdown of creditors, so you cannot see whether the growth is owed to HMRC, a bank or a director;
- a switch of accounts type between years changes which lines appear.
Treat a micro-entity trend as a set of questions, not answers.
Simple ratios
Two ratios cover most of what a small company comparison needs, and both use lines found in most filings.
Current ratio = Current assets / Creditors due within one year
Cash to creditors = Cash at bank / Creditors due within one yearA current ratio below 1 means negative net current assets. Cash to creditors shows how much of next year's bills the bank balance could cover today. Watch the direction more than any single value.
Worked example
The table below uses illustrative figures for a fictional company, not a real one. It shows how three years of balance sheets, taken from two filings, reveal a trend that no single year shows.
| Illustrative figures (£) | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Fixed assets | 30,000 | 26,000 | 22,000 |
| Cash at bank | 42,000 | 28,500 | 9,800 |
| Current assets (including cash) | 96,000 | 88,000 | 71,000 |
| Creditors due within one year | 61,000 | 74,000 | 92,000 |
| Net current assets (liabilities) | 35,000 | 14,000 | (21,000) |
| Total assets less current liabilities | 65,000 | 40,000 | 1,000 |
| Creditors due after one year | 20,000 | 18,000 | 16,000 |
| Net assets (liabilities) | 45,000 | 22,000 | (15,000) |
| Average employees | 6 | 6 | 5 |
| Current ratio | 1.57 | 1.19 | 0.77 |
| Cash to creditors | 0.69 | 0.39 | 0.11 |
Year 3 alone shows a small company with net liabilities, which on its own is common and not proof of trouble. The three-year view is worse: net assets have fallen two years running, creditors have grown by half, cash has collapsed and net current assets have turned negative. If this were a customer, you would shorten credit terms and ask for management accounts.
Red flags in a trend
These patterns deserve a closer look whenever they appear across three or more years.
- Net assets falling three years running. Losses are being absorbed and somebody is funding them. Our guide on negative net assets explains what happens when the figure crosses zero.
- Creditors growing faster than current assets. Suppliers, HMRC or the bank are carrying more of the business.
- Cash collapse. A fall in cash with stable or rising creditors often precedes late payment.
- Switching to dormant accounts. Dormant accounts mean no significant transactions in the year. A trading company that suddenly files dormant accounts has stopped trading, at least in that company.
- Year end changes and late filings together. A moving year end combined with overdue accounts can mean the company is buying time.
Getting the history as data
Copying figures from PDF filings by hand is slow and error-prone. Our financial history pack gives a company's multi-year balance sheet history as an Excel or CSV file for £9 (pricing), and the API returns the same history as JSON with a free key (docs).
General information, not financial advice.
Sources
- The Small Companies and Groups (Accounts and Directors' Report) Regulations 2008, Schedule 1, paragraph 7: corresponding amounts, legislation.gov.uk, accessed 18 October 2026.
- Companies Act 2006, section 392: alteration of accounting reference date, legislation.gov.uk, accessed 18 October 2026.
- Companies Act 2006, section 411: information about employee numbers and costs, legislation.gov.uk, accessed 18 October 2026.
- Life of a company: annual requirements, part 1 accounts, GOV.UK, accessed 18 October 2026.
- Prepare annual accounts for a private limited company: micro-entities, small and dormant companies, GOV.UK, accessed 18 October 2026.
FAQ
How do I compare company accounts year on year?
Take the latest filing and the one from two years earlier; with their prior year columns they give up to four years. Put net assets, cash, current assets, creditors due within one year, net current assets and employees side by side, using the most recent version of each figure. Then look at the direction of each line.
Why is last year's figure different in this year's accounts?
The company has restated it. Small company rules allow a prior year amount to be adjusted when it is not comparable with the current year, but the notes must explain the non-comparability and the adjustment. Common reasons are reclassifications between lines and corrections of errors. Use the restated figure for your comparison and read the note.
Can I compare accounts when the year end has changed?
Yes for balance sheet lines, because they are measured on a single date regardless of period length. Not directly for profit or turnover, because a longer period accumulates more. An accounting reference period cannot be extended beyond 18 months. If the year end moves repeatedly, treat that as a question to ask rather than an accounting detail.
What ratios should I calculate from small company accounts?
The current ratio, which is current assets divided by creditors due within one year, and cash to creditors, which is cash at bank divided by the same creditors. Both use lines found in most small company balance sheets. A current ratio below 1 means negative net current assets. The trend over three years matters more than one year's value.
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