COMPARATIVE, COMMON SIZE AND TREND STATEMENTS

Q.1 Prepare a Comparative Revenue Statement in Vertical Form from the following details
Trading, Profit and Loss Account of Nilkamal Ltd. for the year ended 31st March
Particulars 2019 2020 Particulars 2019 2020
To Opening Stock 2,25,000 3,00,000 By Sales 45,00,000 60,00,000
To Purchases 22,50,000 32,10,000 By Closing Stock 3,00,000 3,60,000
To Interest on Debenture 1,50,000 1,50,000 By Dividend 12,000 39,000
To Depreciation: By Profit on Sale of Machinery 24,000 -
Furniture 15,000 15,000
Machinery 36,000 30,000
To Administrative Expenses 2,94,000 4,41,000
To Selling Expenses 4,56,000 7,53,000
To Carriage Outward 75,000 3,15,000
To Loss by Fire - 15,000
To Wages 1,95,000 3,00,000
To Provision for Tax 5,70,000 4,35,000
To Net Profit 5,70,000 4,35,000
Total ₹ 48,36,000 63,99,000 Total ₹ 48,36,000 63,99,000

Q.2 Balance Sheets of Star Ltd. for the year ended 31st December, 2018 and 31st December, 2019 are as follows
Liabilities 2018 2019 Assets 2018 2019
Equity Share Capital 8,00,000 8,00,000 Building 6,00,000 5,40,000
10% Pref. Share Capital 6,00,000 6,00,000 Land 2,00,000 2,00,000
General Reserves 4,00,000 4,90,000 Plant 6,00,000 5,40,000
15% Debentures 2,00,000 3,00,000 Furniture 2,00,000 2,80,000
Creditors 3,00,000 4,00,000 Stock 4,00,000 6,00,000
Bills Payable 1,00,000 1,50,000 Debtors 4,00,000 6,00,000
Tax Payable 2,00,000 3,00,000 Cash 2,00,000 2,80,000
Total ₹ 26,00,000 30,40,000 Total ₹ 26,00,000 30,40,000
Prepare Comparative Balance Sheet in vertical form.

Q.3 Prepare comparative balance sheet from the following information provided by ACC Ltd.
Liabilities 2019 2020 Assets 2019 2020
Equity Share Capital 300000 600000 Plant & Machinery 350000 400000
Bank Loan 60000 65000 Factory Building 144900 140000
Profit & loss Account 85000 193000 Long term Investments 200000 312000
Income received in Advance 9000 10000 Debtors 114000 195000
Bank Overdraft 40000 42000 Stock 85000 97000
Sundry Creditors 105000 122000 Short term Advance 17500 11200
Bills Payable 56500 62500 Prepaid Expenses 4000 3200
Capital Redemption Reserve 63000 72000 Bank 126000 138000
Public Deposits 100000 70000 Discount on issue of shares 6000 4000
10% Debentures 165000 200000 Furniture & Fixtures 280300 334900
Preference Share Capital 500000 400000 Patents and patterns 7700 7000
Investments (Temporary) 3500 6000
Preliminary expenses 4600 3200
Goodwill 140000 185000
Total ₹ 14,83,500 18,36,500 Total ₹ 14,83,500 18,36,500

1 Financial Statement Analysis

Q.4 From the following information of Mahindra Ltd. for the year ended 31st March, 2019 and 31st March 2020,
you are required to comment with the help of comparative statement after rearranging in Vertical Form
suitable for analysis
2019 2020
Sales 15,20,000 22,80,000
Return Inward 20,000 30,000
Opening Stock-Raw Material 7,600 7,600
Purchases of Raw Material 3,90,000 5,85,000
Work in Progress-Opening 10,000 10,000
Work in Progress-Closing 10,000 15,000
Closing Stock-Raw Material 7,600 11,400
Power 50,400 75,600
Depreciation on Machinery 70,000 1,05,000
Repairs Factory Building 40,000 60,000
Direct Labour 2,50,500 3,75,750
Selling and Distribution Expenses 1,05,400 1,58,100
Finance Expenses 70,000 70,000
Administrative Expenses 73,500 73,500

Q.5 Complete the following Comparative Statements of DT Ltd. by ascertaining the missing balances.
Particulars 2019 2020 Absolute % Increase
Increase or or Decrease
Decrease
(A) Sales ? ? (+)4,00,000 +25.00%
Cost of goods sold: - -
Opening Stock 80,000 1,20,000 ? ?
Purchases ? ? (+)2,00,000 +20.00%
Wages 2,40,000 4,40,000 ? ?
Less: Closing Stock ? 1,60,000 ? ?
(B) Cost of goods sold ? ? ? ?
(C) Gross Profit (A-B) ? ? ? ?
Less: Operating Expenses - - - -
a. Administrative ? ? (+)20,000 +20.00%
b. Selling 50,000 60,000 ? ?
c. Finance ? ? (+)4,500 +22.50%
(D) Total Operating Expenses ? ? ? ?
Net Operating Profit (C-D) ? ? ? ?
Add : Non-Operating Income 20,000 1,00,000 ? ?
Net Profit before Tax ? ? ? ?
Less : Provision for Tax ? ? ? ?
Net Profit after Tax 2,10,000 2,35,000 ? ?

2 Financial Statement Analysis

Q.6 From the following Profit and Loss Account information for year ending 2019 and 2020, prepare Common
Size statement. Arrange information in Vertical Form suitable for analysis.
Particulars 2019 2020
Sales 10, 00,000 15, 00,000
Closing Stock 2, 50,000 3, 00,000
Opening Stock 1, 50,000 2, 50,000
Purchases 3, 00,000 4, 50,000
Wages 2, 00,000 3, 00,000
Manufacturing Expenses 1, 00,000 1, 50,000
Administrative Expenses 50,000 50,000
Selling & Distribution Expenses 50,000 75,000
Loss on Sale of Furniture 25,000 0
Interest on Debentures 10,000 10,000
Profit on Sale of Shares 50,000 0

Q.7 The following are the Balance sheets of X Ltd & Y Ltd for the year ending 31 st December 2019.
Liabilities X Ltd Y Ltd Assets X Ltd Y Ltd
Equity share capital 2,50,000 1,70,000 Land & Building 3,50,000 2,75,000
Preference share capital 1,20,000 80,000 Plant & Machinery 2,70,000 3,00,000
Reserve & surplus 50,000 70,000 Investment (temporary) 72,000 12,000
Loans 3,50,000 2,79,000 Book debts 47,500 12,000
Dividend declared 2,000 7,500 Prepaid expenses 35,400 -
Sundry creditors 18,000 8,000 Cash & bank 48,690 34,000
Bills payable 25,000 14,000
Outstanding Expenses 8,590 4,500
Total ₹ 8,23,590 6,33,000 Total ₹ 8,23,590 6,33,000
Present the data in a common size statement & analyse.

Q.8 Prepare common size balance sheets of A Ltd & B Ltd as on 31st March 2019 from the following balance
sheets of the two companies & give your interpretation.
Liabilities A Ltd B Ltd Assets A Ltd B Ltd
Equity share capital 4,80,000 7,20,000 Investments 43,200 -
Preference share capital 2,60,000 1,20,000 Discount on issue of shares 1,20,000 96,000
General reserve 48,000 72,000 Factory building 2,00,000 1,20,000
Profit & loss A/c - 64,800 Machinery 2,16,000 4,58,000
Debentures 67,200 93,600 Fixed deposits 24,000 84,000
Sundry creditors 70,000 1,00,000 Preliminary expenses 24,000 16,000
Bills payable 17,200 27,200 Stock 2,04,000 1,87,200
Outstanding salary 39,200 14,400 Sundry debtors 1,80,000 2,59,200
Provision for taxation 67,200 76,800 Bank 30,600 50,000
Cash 7,000 18,400
Total ₹ 10,48,800 12,88,800 Total ₹ 10,48,800 12,88,800

3 Financial Statement Analysis

Q.9 The following are the Profit & Loss accounts of TDP Ltd for the year 2019 & 2020. Prepare a common size
income statement.
Particulars 2019 2020 Particulars 2019 2020
To Opening Stock 65,000 45,000 By Sales 8,00,000 9,84,500
To Return Inwards 20,000 30,000 By Closing stock 45,000 98,000
To Discount allowed 3,000 3,500 By Income on investment 15,400 16,000
To Interest on debentures 6,000 6,000 By Dividend received 8,400 14,600
To Salaries 48,700 60,800 By Profit on sale of Investments 2,400 26,500
To Loss on sale of plant 9,000 0 By Bad Debts recovery 3,200 4,900
To Depreciation 64,800 67,900 By Profit on sale of Fixed Assets 15,000
To Selling expenses 6,300 9,800
To Factory Managers Salary 47,500 60,500
To Purchases 4,05,000 6,58,000
To Legal Expenses 8,700 9,800
To Sales Tax 8,200 9,300
To Travel Expenses 40,700 31,500
To Reserve for Bad debts 6,900 7,500
To Audit Expenses 8,800 9,800
To Insurance 3,100 6,400
To Wages 64,500 68,700
To Rent & rates 12,400 31,500
To Net Profit 45,800 43,500
Total ₹ 8,74,400 11,59,500 Total ₹ 8,74,400 11,59,500

Q.10 Complete the following common size Income Statement

Particulars ₹ %
Gross sales 9,90,000 ?
Less: Sales Return ? 10
Net Sales ? ?
Less: Cost of Goods Sold ? 40
Gross Profit ? ?
Less: Operating expenses - -
(a)Administrative Expenses ? ?
(b)Finance Expenses ? 2
(c)Selling and Distribution Expenses 72,000 ?
Operating Net Profit ? ?
Add Non-Operating Income 45,000 ?
Less: Non-Operating Expenses ? 15
Net Profit before Tax ? 30

4 Financial Statement Analysis

Q.11 You are furnished with the following Revenue statements for the year ended March 31st 2019.
Particulars 2017 2018 2019
Sales 50,00,000 60,00,000 72,00,000
Less: cost of Goods Sold 32,00,000 38,00,000 46,00,000
Margin 18,00,000 22,00,000 26,00,000
Management Expenses 3,00,000 3,50,000 4,00,000
Sales expenses 5,00,000 6,00,000 7,20,000
Interest on Borrowing 3,00,000 4,00,000 5,00,000
Total Expenses 11,00,000 13,50,000 16,20,000
Net profit before depreciation & taxation 7,00,000 8,50,000 9,80,000
Depreciation 5,00,000 4,50,000 6,00,000
Profit before taxation 2,00,000 4,00,000 3,80,000
Income tax 80,000 2,00,000 1,85,000
Profit after tax 1, 20,000 2,00,000 1,95,000
You are asked to prepare trend analysis and Comment on the same.

Q.12 Rearrange above data of Petrol Ltd. in a form suitable for analysis and calculate Trend Percentage and offer
your comments.
Year Fixed Investments Net Preliminary Total Owner's Term Debenture Total
Assets Current Expenses Assets Fund Loan Liabilities
Assets
2000 20 10 40 5 75 20 20 35 75
2001 22 9 30 4 65 20 20 25 65
2002 24 8 20 3 55 20 20 15 55
2003 26 7 30 2 65 40 20 5 65
2004 28 6 40 1 75 60 15 0 75

Q.13 Following are incomplete comparative statement for the year ended 31 st March.

Particulars ₹. (in Lacs) Trend % Base Year 2017

2017 2018 2019 2017 2018 2019
Net Sales 700 ? ? 100 120 140
(-) Cost of goods sold 560 ? ? 100 110 ?
Gross Profit 140 ? ? 100 160 150
(-) Operating Expenses 84 ? ? 100 125 175
Operating Profit 56 ? ? 100 ? ?
(+) Non- Operating Income ? ? 100 120 50
66 ? ? 100 ? ?
(-) Non-Operating Expense 6 ? ? 100 100 200
Net Profit 60 125 56 100 208.33 93.33

5 Financial Statement Analysis

Q.14 Complete the following Trend Statement
M/S. Swapna Ltd. Income Statement for the year 31st March
Particulars Amount ₹ Trend Percentage
2017 2018 2019 2020 2017 2018 2019 2020
Sales ? 15,00,000 ? 22,00,000 ? ? ? 220
Cost of Goods Sold 5,00,000 ? ? ? ? 160 200 ?
Gross Profit ? ? ? ? ? ? 200 ?
Operating Expenses ? 4,00,000 ? 6,50,000 ? ? ? 260
Operating Profit ? ? 6,00,000 5,50,000 ? ? ? ?
Non-Operating Income 10,000 ? ? ? ? 250 500 25
Non-Operating Expenses ? ? ? ? ? 250 ? 525
Profit Before Tax 2,50,000 ? ? ? ? ? 240 ?
Tax 50% ? ? ? ? ? ? ? ?
Profit After Tax ? ? ? ? ? ? ? ?

Q.15 Complete the following Trend Statement. M/s. SR Ltd. Balance Sheet as at 31st March
Particulars Years Base Year
2020 2019 2018 2017
₹ % ₹ % ₹ % ₹ %
Assets:
Fixed Assets (Original Cost) ? ? ? ? ? ? ? ?
Depn. at 20% of Original cost ? ? ? ? ? ? ? ?
Written Down Value 800 80 ? 160 ? 100 ? ?
Current Assets ? ? ? 100 ? 80 ? ?
Current Liabilities ? 140 ? ? ? 100 500 ?
Working Capital ? ? 400 ? ? ? 500 ?
Capital Employed 1500 ? ? ? ? ? ? ?
Liabilities:
Share capital 1000 ? ? 110 ? ? ? ?
Reserves ? ? ? ? ? 150 200 ?
Net Worth ? 110 ? ? ? ? ? ?
Debt ? ? 800 ? ? 160 300 ?
Capital Employed ? ? ? ? ? ? ? ?

Q.16 The following are some figures in the balance sheet as on 31 st March of an entity.
Particulars 2017 2018 2019 2020
Fixed Assets at cost 80,000 1,20,000 1,60,000 2,00,000
th th
Accumulated Depreciation (3/5 of WDV) (5/7 of WDV) (50% of cost) (150% of WDV)
Current Assets 5,00,000 6,00,000 7,20,000 8,00,000
Working Capital 3,50,000 4,30,000 5,20,000 5,60,000
Long term borrowings 1,50,000 (20% of Net Capital Employed) 50,000 Nil
Net worth (excluding 2,00,000 ? 4,50,000 ?
undistributed profits or losses)
Accumulated Profit & Loss ? 70,000 ? ?
Prepare Balance Sheets in vertical form and trend analysis in percentage form.

6 Financial Statement Analysis