Common Size Statements:
Common
size statement is a statement in which amounts of individual item of balance
sheet and profit and loss account for one or more years are expressed in terms
of percentage of a common base. The common base can be
-
Net
sales in the case of profit and loss account and
-
Total
of balance sheet for the balance sheet.
Types
of Common Size Statement:
-
Common
size income statement
- Common size balance sheet
1. Prepare
a common size Income Statement from the following information:
2020
|
(Rs.) |
|
|
Sales Cost of
Goods Sold Operating
Expenses Depreciation Income
from Investment Income
Tax |
5,00,000 3,78,000 62,500 22,000 70,000 32,500 |
Solution:
|
Particulars |
Amount (Rs.) |
Calculation |
Percentage |
|
1. Sales |
5,00,000 |
(5,00,000 / 5,00,000)*100 |
100.00% |
|
Less: Cost of Goods Sold |
3,78,000 |
(3,78,000 / 5,00,000)*100 |
75.60% |
|
2.
Gross Profit |
1,22,000 |
(1,22,000/5,00,000)*100 |
24.40% |
|
Less: Operating Expenses |
62,500 |
(62,500 / 5,00,000)*100 |
12.50% |
|
Less: Depreciation |
22,000 |
(22,000 / 5,00,000)*100 |
4.40% |
|
3.
Operating Profit |
37,500 |
(37,500/5,00,000)*100 |
7.50% |
|
Add: Income from Investment |
70,000 |
(70,000 / 5,00,000)*100 |
14.00% |
|
4.
Net Profit Before Tax |
1,07,500 |
(1,07,500/5,00,000)*100 |
21.50% |
|
Less: Income Tax |
32,500 |
(32,500 / 5,00,000)*100 |
6.50% |
|
5.
Net Profit After Tax |
75,000 |
(75,000/5,00,000)*100 |
15.00% |
15. From
the following Income Statement, prepare Common Size Income Statement and give
your comments: 2022
|
Particulars
|
2018 (Rs.) |
2019
(Rs.) |
Particulars
|
2018
(Rs.) |
2019 (Rs.) |
|
To Cost
of Goods Sold To Gross
Profit c/d |
95,000 25,000 |
1,05,000 40,000 |
By Net
Sales |
1,20,000 |
1,45,000 |
|
|
1,20,000 |
1,45,000 |
|
1,20,000 |
1,45,000 |
|
To
Office Expenses To
Distribution Expenses To Net
Profit c/d |
2,000 3,000 20,000 |
8,000 5,000 27,000 |
By Gross
Profit b/d |
25,000 |
40,000 |
|
|
25,000 |
40,000 |
|
25,000 |
40,000 |
|
Particulars |
2018 (Rs.) |
% |
2019 (Rs.) |
% |
|
Net Sales |
1,20,000 |
100.00% |
1,45,000 |
100.00% |
|
Less: Cost of Goods Sold |
95,000 |
79.17% |
1,05,000 |
72.41% |
|
Gross Profit |
25,000 |
20.83% |
40,000 |
27.59% |
|
Less: Office Expenses |
2,000 |
1.67% |
8,000 |
5.52% |
|
Less: Distribution
Expenses |
3,000 |
2.50% |
5,000 |
3.45% |
|
Net Profit |
20,000 |
16.66% |
27,000 |
18.62% |
12. Prepare a
Common Size Income Statement of Maina Ltd. from the following informations: 2024
|
Particulars |
2022
(Rs.) |
2023
(Rs.) |
|
Sales Sales
Returns Cost of
Goods Sold Office
Expenses Non-operating
Incomes Non-operating
Expenses Income Tax
Rate |
1,05,000 5,000 70,000 3,000 5,000 1,000 50% |
1,10,000 10,000 74,800 3,200 6,600 1,100 50% |
|
Particulars |
2022 (Rs.) |
% of Sales |
2023 (Rs.) |
% of Sales |
|
Sales |
1,05,000 |
105.00% |
1,10,000 |
110.00% |
|
Less: Sales Returns |
5,000 |
5.00% |
10,000 |
10.00% |
|
1. Net Sales |
1,00,000 |
100.00% |
1,00,000 |
100.00% |
|
Less: Cost of Goods Sold |
70,000 |
70.00% |
74,800 |
74.80% |
|
2. Gross Profit |
30,000 |
30.00% |
25,200 |
25.20% |
|
Less: Office Expenses |
3,000 |
3.00% |
3,200 |
3.20% |
|
3. Operating Profit |
27,000 |
27.00% |
22,000 |
22.00% |
|
Add: Non-operating
Incomes |
5,000 |
5.00% |
6,600 |
6.60% |
|
Less: Non-operating
Expenses |
1,000 |
1.00% |
1,100 |
1.10% |
|
4. Net Profit Before Tax |
31,000 |
31.00% |
27,500 |
27.50% |
|
Less: Income Tax (@ 50%) |
15,500 |
15.50% |
13,750 |
13.75% |
|
5. Net Profit After Tax |
15,500 |
15.50% |
13,750 |
13.75% |
Q.1. From the following Balance Sheet
as at 31st March, 2012 and 2013, Common Size Balance Sheet:
|
Particulars |
2012 (Rs.) |
2013 (Rs.) |
|
I. EQUITY AND LIABILITIES 1. Shareholder’s Funds a) Share Capital b) Reserve and Surplus 2. Non-Current Liabilities: Long-term
Borrowings (12% Debentures) 3. Current Liabilities (Trade Payables) |
7,50,000 4,50,000 7,50,000 3,00,000 |
15,00,000 3,00,000 12,00,000 6,00,000 |
|
Total |
22,50,000 |
36,00,000 |
|
II. ASSETS 1. Non-Current Assets: Fixed Assets 2. Current Assets |
15,00,000 7,50,000 |
22,50,000 13,50,000 |
|
Total |
22,50,000 |
36,00,000 |
|
Particulars |
2012 (Rs.) |
% of Total |
2013 (Rs.) |
% of Total |
|
I. EQUITY AND
LIABILITIES |
||||
|
1. Shareholder’s
Funds |
||||
|
Share Capital |
7,50,000 |
33.33% |
15,00,000 |
41.67% |
|
Reserve and Surplus |
4,50,000 |
20.00% |
3,00,000 |
8.33% |
|
2. Non-Current
Liabilities |
||||
|
Long-term Borrowings (12% Debentures) |
7,50,000 |
33.33% |
12,00,000 |
33.33% |
|
3. Current
Liabilities |
||||
|
Trade Payables |
3,00,000 |
13.34% |
6,00,000 |
16.67% |
|
Total Equity and Liabilities |
22,50,000 |
100.00% |
36,00,000 |
100.00% |
|
II. ASSETS |
||||
|
1.
Non-Current Assets |
||||
|
Fixed Assets |
15,00,000 |
66.67% |
22,50,000 |
62.50% |
|
2. Current Assets |
7,50,000 |
33.33% |
13,50,000 |
37.50% |
|
Total Assets |
22,50,000 |
100.00% |
36,00,000 |
100.00% |
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