Comparative Statements Concept and Past Exam Questions and Answers AHSEC & CBSE

Meaning of Comparative Statements:

These are the statements showing the profitability and financial position of a firm for different periods of time in a comparative form to give an idea about the position of two or more periods. It usually applies to the two important financial statements, namely, balance sheet and statement of profit and loss prepared in a comparative form. The financial data will be comparative only when same accounting principles are used in preparing these statements. If this is not the case, the deviation in the use of accounting principles should be mentioned as a footnote. Comparative figures indicate the trend and direction of financial position and operating results. This analysis is also known as ‘horizontal analysis’.

Objectives of preparing comparative balance sheets and income statements:

1. Evaluate financial performance over time: These statements allow stakeholders to compare the financial position and performance of a company across different periods, facilitating the assessment of trends, growth, and stability.

2. Assess changes in assets, liabilities, revenues, and expenses: By analyzing the changes in key financial metrics over time, stakeholders can identify shifts in the company's resources, debt levels, revenue streams, and cost structures.

3. Identify trends, growth areas, and risks: Comparative statements help in identifying trends such as increasing revenues, declining profitability, or rising debt levels. They also highlight areas of growth and potential risks that may require attention or strategic adjustments.

Solved Practical problems of Previous exams

2025 Question Paper

12. Prepare a Comparative Income Statement from the following particulars of BP Ltd. 6

Particulars	2022 (₹)	2023 (₹)
Sales	4,00,000	6,00,000
Cost of Goods Sold	60% of Sales	60% of Sales
Indirect Expenses	5% of Sales	5% of Sales
Rate of Income Tax	50% of Net Profit before tax	50% of Net Profit before tax

Solution:

Comparative Income Statement

Particulars	2022 (₹)	2023 (₹)	Absolute Change	Percentage Change (%)
1. Revenue from Operations (Sales)	4,00,000	6,00,000	2,00,000	50.00
2. Less: Cost of Goods Sold	2,40,000	3,60,000	1,20,000	50.00
3. Gross Profit (1 - 2)	1,60,000	2,40,000	80,000	50.00
4. Less: Indirect Expenses	20,000	30,000	10,000	50.00
5. Net Profit Before Tax (3 - 4)	1,40,000	2,10,000	70,000	50.00
6. Less: Income Tax (50%)	70,000	1,05,000	35,000	50.00
7. Net Profit After Tax (5 - 6)	70,000	1,05,000	35,000	50.00

2023 Question Paper

12. Prepare a Comparative Income Statement from the following particulars:     6

Particulars	2020 (Rs.)	2021 (Rs.)
Gross Sales Sales Returns Cost of Goods Sold Operating Expenses Income Tax	1,20,200 10,400 80,000 24,000 50%	1,35,800 7,600 84,000 18,000 50%

Solution:

Particulars	2020 (₹)	2021 (₹)	Absolute Change (₹)	Percentage Change (%)
Gross Sales	1,20,200	1,35,800	15,600	12.98
Less: Sales Returns	10,400	7,600	(2,800)	(26.92)
1. Net Sales	1,09,800	1,28,200	18,400	16.76
2. Less: Cost of Goods Sold	80,000	84,000	4,000	5.00
3. Gross Profit (1 - 2)	29,800	44,200	14,400	48.32
4. Less: Operating Expenses	24,000	18,000	(6,000)	(25.00)
5. Net Profit Before Tax (3 - 4)	5,800	26,200	20,400	351.72
6. Less: Income Tax (50%)	2,900	13,100	10,200	351.72
7. Net Profit After Tax (5 - 6)	2,900	13,100	10,200	351.72

2019 Question Paper

Prepare a Comparative Income Statement from the following particulars: 5

Particulars	2017 (Rs.)	2018 (Rs.)
Sales Cost of Goods Sold Administrative Expenses Other Income Income Tax	4,00,000 2,00,000 40,000 20,000 60,000	5,00,000 3,00,000 1,00,000 30,000 70,000

Comparative Income Statement

Particulars	2017	2018	Changes
			Absolute	%
Sales Less: Cost of goods sold Gross profit Less: Administration Expenses   Add: Other Income Net profit before tax Less: Income tax	4,00,000 2,00,000	5,00,000 3,00,000	1,00,000 1,00,000	25 50
	2,00,000 40,000	2,00,000 1,00,000	Nil 60,000	Nil 150
	1,60,000 20,000	1,00,000 30,000	(60,000) 10,000	37.50 50
	1,80,000 60,000	1,30,000 70,000	(50,000) 10,000	27.78 16.67
Net profit after tax	1,20,000	60,000	(60,000)	50

2012 Question Paper

Q17: Prepare a comparative income Statements of Sunny Ltd. with the help of the following information.   (5)

Particulars	2011 (Rs)	2012 (Rs)
Sales Cost of Goods sold Administrative expenses Income Tax	6,00,000 40% of sales 20% of gross profit 50%	8,00,000  50% of Sales  15% of gross profit 50%

Solution:

Comparative Income Statement

Particulars	2009	2010	Absolute change	Percentage change
Sales Less: Cost of goods sold	6,00,000 (2,40,000)	8,00,000 (4,00,000)	2,00,000 (1,60,000)	33.33 66.67
Gross Profit Less: Administrative Expenses	3,60,000 72,000	4,00,000 60,000	40,000 (12,000)	11.11 (16.67)
Operating Profit Less: Income Tax – 50%	2,88,000 1,44,000	3,40,000 1,70,000	52,000 26,000	18.05 18.05
	1,44,000	1,70,000	26,000	18.05