COMMON SIZE STATEMENTS : 443 Current Assets ; = ee Seon Se 2016 | 2017 Inventory z S Fee cchrabis 1,00,000 1,25,000 | 1,40,000| 1,50,000 ‘ 50,000} 60,000 75,000 1,00,000 ed Cash auiaens 10,000} 15,000, 25,000/ 20,000 urrent Assets 40,000 30,000 60,000 50,000 | 2,00,000 | 2,30,000| 3,00,000 | 3,20,000 SOLUTION: COMPARATIVE BALANCE SHEETS as at 31st March, 2017 2014 | 2015] hes Inventory -1,00,000 | 1,25,00 Trade Receivables | 50,000} 60,000} . Cash and Cash Equivalents 10,000 Other Current Assets |» 100) 75 : Too} 115 etree Very Short Answer Questions (Questions Carrying 1 Mark) —_——. Remembering : Q. 1. What are Common Size Statements? Ans. Common size statements express all items of a financial statement as a Percentage of some common base such as revenue from operations for profit and loss Statement and total assets for balance sheet. Q. 2. What is the meaning of Common Size Balance Sheet? Ans, A common size balance sheet is a statement in Which total of assets or equity & liabilities is assumed to be equal to 100 and all the figures are expressed as Percentage of the total. Q. 3. What is the meaning of Common Size Statement of Profit & Loss? Ans, A common size statement of Profit & Loss is a statement in which the figure of revenue from operations is assumed to be equal to 100 and all other figures are expressed as percentage of revenue from operations. Short Answer Questions (Questions Carrying 2 Marks) 1. What is meant by Common Size Statements? Give any two uses of Common Size Statements. Scanned with CamScannerSESTATIN oo ais betes? : rt Las? What ae ict, sheet oa company f0F 10 year, “profit & Loss for {v0 year, ‘conmon Size Slatement of Prog, sine Steen nn Size BT ze Staten! 4. Whats eat by Tend (CAL QUESTIONS fee A eal ore of stan) Nos. 1 to! jet x a a sid srs 0.2. The following talance sheets relate to Modern hese laser e e eeig Modem Computers Lad cover BALANCE SHEETS ay at 3st Marsh jon SIZESTATEMENTS, (b Short term Provisions current Ae: 30000 (a) Inventory Fee rie Rocnbles 2am co om i 15,00,000 = x 3 ie | 1667 : | is 1 4 Q.3. Prepare a common size Balance Sheet and comment onthe financial position ‘of ALid. and B Ltd, The Balance Sheets of Lid. and B Lu. 2s a 31.3.2018 ae given Scanned with CamScanneras a6] ——— am a8 COMMON SIZE STATEMENTS Q. 6. Convert the following particulars into Com Staten soa eta into Common Size Statement of Profit & ct in| ™ Parador ret 10%) as gE -. es $83y Cuma ii . Now Cure 6 SPE ALN germ om Operations AB \come a mc t FOU y Com 4 Pee Employee Benefit Expenses Sateen of Profit SSR aer aim eT = A i si g ae 14,00,000 | 10,00,6q) ‘Revenue from Operations 8,40,000| 6.50.0 Caste Mn Cosert | |eecpoo|: 2am a |_| 79.000} som, “oterncome Ses byenss ______ Cost of Materials Consumed [Toes % of Revenue from Operations 2015-1 16 | 2016-17) ‘Employee Benefit Expenses ‘Cos. of Manials Consumed 65% | 60% | -—-Other Expenses Fnac am. | tog. (battbemeet se Pa es a oe me ‘ollowing particulars are obtained from the books of X Ltd.: Pte Tax aim: | 29% Following . 5 From the following Sutement of Profit & Loss, prepare a Common Sie ‘Statement of Profit & Loss of Jayant Li, forthe year ended 31.3.2018 : ‘Staast of Prot & Los of Jat Lid for the year ended 31.3.2018 Sy tes z Tr = a ‘Other Incomes zy Sexe Cnet : 14,0004 Toll pees 5.000 iano Tee Sieh se ae ar : ‘Reverwe ations 7" $o,0,000 4.00000 ‘acho of 504 0 Td ‘20000 3040000 “Changs in Inventories 120,000 (0,000) (Other Incomes , || 130,000, _ 60,000 (Other Expenses |___3:60,000 |_2,00,000 _ Youarerequied ore a Common Size Statement of Profit & Loss. 13 ier Income i n ‘Parcase of Stock [sclera Sener 5 Bil Te ns. | zs 4 ‘Profit before Tax sl 6: From the following infomation prepare a Common Sie Statement of and Loss of Ashoka Lid: ‘Scanned with CamScanneraa ‘Ober income “Cost of materials consumed “employes tents ‘Taxrae (CBSE. 23 Dg, fof Revers “Q. 9, Calculate the wend percentages fom the following information ‘ending 2015 asthe bse year: ADDI Q. 10. From the (honing nN AL QUESTIONS Preaacammon se Baas Sat She f Sun Li, ap at Sst Mach 20 COMMON SIZE STATEMENTS [Reserves & Surplus (@)Non-Current Liabilities Long-term Borrosngs, @)Current Liabitites| | Trade Payables ‘TOTAL, ASSETS : (Non Current Assets (@ Fed Assets (9 Tangle Asses (6 tangible Asse 2)Curren asets (@)lventres (@) Cash and Cash Equivalents Tort. t (From CBSE. Guidance Notes) Ans. Share Capital 66.67%; Reserve & Surplus 10%; Non-Current Liabilities 20%; Current Liabilities 3.33% Tangible Assets 66.67%; Intangible Assets 3.33%: Inventories 20%; Cash & Cash Equivalents 10%] it Q. 11. Prepare a Common Size Balance Sheet of X Lud from the following information : (Rin Laks) Ans, Year 2015 : Share Capital 50%; Reserve & Surplus 12%; Non-Current Hiiies 2006 Conan L abies 18% Fined Ast 6M; Non Coren: Invesinents 2%; Current Assets 38%. 2016 : Share Capi Liabilities 17.5%; Current Liabilities 24.1 Current Assets 409%.) | Q. 12, From the following information, prepare a Common Size Balance Sheet and comment upon the changes : or; Reserve & Supls 16664 Now Curent he xed Assets 57.5%; Investments 2.5%, er! ‘Scanned with CamScannerHing = Figures of2017 wl be presented fist. Q. 13, Prepare a Common Size Statement of Profit & Loss of Ltd. from the following information : (COMMON SIZE STATEMENTS Prepare a Common Siz Statement of Pot & Loss rom th sb (ther Income ‘Materials Consumed aetap Finance Costs yam | 1526 \ (Other Expenses | | 230 Profit before Tax fae ‘Hint = Figres ofthe year 2016-17 will be presented first Q. 15. Prepare a Common Size Statement of Profit & Loss from the following, Be owe) 3232018 | 3132017 wale ie Revenue from Operations +8,00,00030,00,000 Pacha of Stock in Trade asso 2Lonoc0 Changes in Inventories (132.000) (90,000, Other Expenses 336000 150.000 Otter Income To Income Ta (40%) - Hof Reverse from "Groans 01617 2 Purchase of Stock in Trade » ‘Changes in avenores ® ‘ 5 ter Expenses f 30 300 Peano ee 8 1830 . 16. Prepare a Commen Size Statement of Prot & Los of Vin ape Mil Ltd from the following information nba) =e ‘Re! 313017 | 3132016 ae xe 2 an 12s ‘Scanned with CamScannerCOMMON SIZE STATEMENTS ‘Other Income ‘Purchase of Stock-in Trade ‘Change in Inventories (0.18 From de flowing Sutomeat of Profit & Loss of Star Ltd. forthe yer ended 3st March 2018, prepare Common Size Statement of Profit & Loss PS obi Lid, Prepare a Common Size Q. 21, From the following Balance Sheet of Statement: Scanned with CamScanner——_ Onn COMMON SIZE: STATEMENT OF PROFIT & LOSS 1182018 | Say Jor the years ended Het March, 2018 ant 2019 |. Revenue ftom Operations |, Less: Expenses | Cost of Materials Consumed f 6 8 Employee Benefit Expenses ed 5 6 Depreciation (Onber Expenses e000, 00000 — ‘Toual Expenses -| -| = I, Profit before Tax (1 Less: Tax 208000, 297.000) — = _ Profit ater Tax Se Problem 2. Flin the missing figures inthe following Common Size Statement of Profit & Lass: ‘COMMON SIZE STATEMENT OF PROFTT & LOSS forthe year ended 31st March, 2019 ‘Scanned with CamScannerF Miss OB] - aa itions and Answers 60 JECTIVET » = ste yet Sr IPE QUESTIONS 1. In a common si aren: Taiaion to Problen T i common base," Statement, each item is expressed as a percentage of FEMENT OF PROFIT & 14 2. One of the objectives of e COMMON SI Tr bar 2018 ad 2019 Ganlous items WYS8 OF Common size statement isto present the changes in forthe yars ended 3. Common size statements are prepared inthe form of percenta 883. 4. Main obectve of common sae "sation tetwesnaesandaerisctineane tener ‘5. Main objective of common size balance x items ofincome and expenany anes sheet isto presen changes in various Common size statements ae prepared bath inthe fom of perceages and 7. In a common size statement of profit & loss Figure of net sles is assumes be equal to 100. be otk we 8, In.a common size balance sheet share capital is assumed tobe 100. {9 In.a common size balance sheet figure of revenue from operations is assumed to be 100. 10. Common size statements enable horizontal analysis. 11, In a common size statement, fgures of previous year are taken as base for comparison. (Gee Answers at the end of the book.) (Fiza fg of Ree os Opn wil ound ot Iwill er ae econ Coceeee Tavececenees ete eae: (Ue (2) FIR Wn te Blan Lem sessosonesnnn Statements individual items of financial statement are converted into percentages to some common base. sommes 12900 x2 e16gnsn tat fase or guy ints isasumod 0 Be ei ames: 96000 xl 2 Ina. ae 7 72000000 10 100. 3. In a-common size statement of Profit & Loss figure of assumed to be equal to 100. : 4. Common size statements ae prepared inthe form of. ‘Ansizer to Problem 2: (Gee Answers at the end of the book.) (C) Matching Questions: 1, If Revenue from operations are 240,00,000, then match the following : “p[Puchase of ook in wode[io) [15% ’ 232,00,000 Tal change in Inventory V0) 30% £230,000, Scanned with CamScanner(COMMON SIZE STATEMENTS a 7 - . {Gap ]oter pense €4,00,000 lo Jose (a) [Profit before tax €6, 00,000 (a) [10% = | 2. 1pevenve from operations are £25, 00,000, then match te following (| Purchase of stock im wade 70° _|(o) |€3,00,000 “ip [Other Expenses 129% (8) | £1,50,000 ip |Crange im Inventory 6% __[€€)_|6,00,000 () [Profit before tax (@) | #17,50,000 (See Answers atthe end of the book.) (D) Multiple Choice Questions (Q. 1, Main objective of Common Size statement is (A) To preset the changes in various items {B) To provide fora common base for comparison (C) Toestablish relationship between various items (D) Allofthe Above (Q.2 Main objective of Common Size Balance Sheet 1s (A) To establish relationship between revenue from operations and other items of statement of profit & loss (B) To present changes in assets and liabilities (©) Topresent changes in various items of income and expenses (©) Allofthe Above (Q.3. Common Size Statements are prepared (A) Inte form of Ratios (B) Inthe form of Percentages (©) Inboth ofthe Above (D) None ofthe Above 0.4. Which ofthe following is untrue : (A) Common size Balance Sheet (8) Common size Statement of Profit & Loss (©) Common size cash Flow Statement (D) None ofthe Above ‘Q 5. Main objective of Common Size Statment of Profit & Loss is: (A) To present changes in assets and liabilities (B) To judge the financial soundness (©) To establish relationship between items of statement of Profit & () Allofthe Above ies ot Ete ina nina igure of net revenue from operations is assumed. i ig of e fendiemeteemeneciane &) Rar mare saan revenue from operations and other SoS . (7. In the Balance Sheet ofa Common si 7 e (A) Figure of share capital is assume 7 6) he enctieamanc ie (©) Figure of fixed asses is assumed to 8, Total assets of a firm are %20,00,000 and ity ee fae on (A) 60% (B) 40% (29% (D) 71% 0.9: total assets ofa firm oe £820,000 ats fxed assets are & “ wslbe the percentage ofeurentasesonoatasca? oe () 58% om 7% {Q.10, 1fnet revenue from operations of a fim are 220,000; cost of revenue from ‘operations is €66,000 and operating expenses are £21,600, what willbe the percentage of operating income on net revenue from operations? (A) 55% 8) 45% © 7% (2% 11. 1f net revenue from operations of a frm are £15,00,000; Gross Profit is -9,00,000 and operating expenses are £75,000, what will be percentage of ‘operating income on net revenue from operations? (A) 45% B) 55% 359% (0) 65% Q.12. Main objective of Trend Analysis is (a) To make comparative sy ofthe financial statements fora number of years (B) To indicate the direction of movement (C) To help in forecasts of various items (D) All of the Above 0.13. What will be the trend percentage, if the Inventory of firm is €2,00,00; £240,000; €3,00,000 and £400,000 respectively? AL 12, 15,2 (B) 10, 12, 15,20 (C) 100, 120, 150, 200 (D) None of the Above 14. Ina common size Balance Sheet, ttl iblties are assumed tobe equal 0: @t @ 10 (©) 100 (D) 1,000 15: na common size Statement of Profi & Loss he amount oft revenue om © operations is assumed to be eq! A ®) 0 ~ © 100 ou ‘Scanned with CamScanner —COMMON SIZE STATEMENTS Q. 16, The objective of common size Statement of Profit & Loss is not to (A) Present Changes in Various items of incomes and expenses (B) Judge the cost items (©) Establish relationship between revenue from operations and other items of statement of profit & loss (D) Judge the relative financial soundness for different enterprises (See Answers at the end of the book.) Scanned with CamScanner