Example: Following are the two Balance Sheets of A Ltd and B.Ltd on 31-3-2008.

A Ltd. A.Ltd B.Ltd B.Ltd.

Assets:
Cash 27 72

Sundry Debtors 220 226

Stock 100 174
Prepaid Expenses 11 21
Other Current assets 10 21

Fixed assets(net) 635 513

Total Assets 1003 1027

Liabilities & Capital:

Sundry Creditors 42 154

Other Current Liabilities 78 62

Fixed Liabilities 225 318
Capital 658 493

Total Liabilities 1003 1027

From the above data, prepare a common-size statement and make interpretation

Solution:

Common Size Balance Sheets

A Ltd. B.Ltd.

Amount Rs. Percentage Amount Rs. Percentage

Current Assets
Cash 27 2.69 72 7.01
Sundry debtors 220 21.93 2.26 22.01
Stock 100 9.97 174 16.95
Prepaid Expenses 11 1.1 21 2.04

Other current assets 10 0.99 21 2.04

Total current assets 368 36.68 514 50.05

Fixed Assets
Fixed assets (net) 365 63.32 513 49.95

Total Assest 1003 100 1027 100

Current Liabilities
Sundry Creditors 42 4.19 154 14.99
current liabilities 78 7.78 62 6.04
Totalcurrent liabilities 120 11.97 216 21.03
Fixed Liabilities 225 22.43 318 30.97

Capital 658 65.6 493 48

Total liabilities 1003 100 1027 100

and Capital
 COMMON SIZE INCOME STATEMENT

Example 10: Following are the Income statements of a company for the years ending 31st Dec. 2008 and 2009:

2008 2009

(Rs. In '000) (Rs. In '000)

Sales 500 700

Miscellaneous Income 20 15
520 715
Expenses:
Cost of sales 325 510
Office expenses 20 25

Selling expenses 30 45

Interest 25 30
400 610
Net Profit 120 105
520 715

Solution: Common Size Income Statement

for the year ending 31st Dec. 2008 and 2009

2008 2009

Particulars (Rs.'000) % (Rs.'000) %

Sales 500 100 700 100

Less:Cost of sales 325 65 510 72.86

Gross Profit 175 35 190 27.14

Operating Expenses:

Office Expenses 20 4 25 3.58

Selling Expenses 30 6 45 6.42

Total Operating Expenses 50 10 70 10

Operating Profit (G.P- O.E) 125 25 120 17.14

Miscellaneous Income 20 4 15 2.14
Total Income 145 29 135 19.28
Less: Interest 25 5 30 4.28

Net Profit 120 24 105 15

31st Dec. 2008 and 2009:
 TREND ANALYSIS

Example: Calculate the trend percentages from the following figures of X.Ltd. Taking 2005 as the base and interpret

Year Sales Stock Profit Before Tax

2005 1881 709 321

2006 2340 781 435

2007 2655 816 458

2008 3021 944 527

2009 3768 1154 672

Solution:
Trend Index Percentages

Year Sales Stock Profit before tax

Amount (Lacs) Trend % Amount (Lacs) Trend % Amount (Lacs) Trend %

2005 1881 100 709 100 321 100

2006 2340 124 781 110 435 136

2007 2655 141 816 115 458 143

2008 3021 161 944 133 527 164

2009 3768 200 1154 162 672 209

as the base and interpret them:
 Comparative Balance Sheet

Example: from the following information prepare comparative Balance Sheet of Depth ltd.

Particulars 31.12.08 31.12.07

(Rs.) (Rs.)

Equity Share capital 2500000 2500000

Fixed Assets 3600000 3000000

Reserves & Surplus 600000 500000

Investments 500000 500000

Long-term loans 1500000 1500000

Current Assets 1050000 1500000

Current Liabilities 550000 550000

Solution:
Comparative Balance Sheet of Depth Ltd
(As on 31.12.07 and 31.12.08)

Particulars 2007(Rs.) 2008(Rs.) Absolute Change (Rs.)

Fixed Assets 3000000 3600000 600000

Investments 500000 500000 0

Current assets 1500000 1050000 -450000

Total Assets 5000000 5150000 150000

Equity Share Capital 2500000 2500000 0

Reserves & Surplus 500000 600000 1000000

Long-term loans 1500000 1500000 0

Current liabilities 500000 -550000 -50000

Total Capital 5000000 5150000 -150000

ance Sheet of Depth ltd.

f Depth Ltd

Percentage Change

20

30

20

0
-10

-3
 Comparative Income Statement

Example: From the following information relating to ram ltd. Prepare a comparative income Statement showing the p

Particulars 2004 (Rs.) 2005 (Rs.)

Sales 600000 900000

Material consumed 300000 480000

Office & Selling Expenses 200000 280000

Income Tax 50000 70000

Profits 50000 70000

Solution:
Comparative Income Statement of Ram Ltd.

Particulars 2004(Rs.) 2005(Rs.) Absolute change

Increase/decrease

Sales 600000 900000 300000

Less: cost of material 300000 480000 180000

Gross Profit 300000 420000 120000

Less:Office & Selling Exp 200000 280000 80000

Net Profit 100000 140000 40000

Less: Income Tax 50000 70000 20000

Net Profit after Tax 50000 70000 20000

rative income Statement showing the percentage increase or decrease in 2005 over 2004.

t of Ram Ltd.

% Change

300000/600000*100=50%

180000/300000*100=60%

120000/300000*100=40%

80000/200000*100=40%

40000/100000*100=40%

20000/50000*100=40%

20000/50000*100=40%