Shri Vile Parle Kelavani Mandal’s

Narsee Monjee College of Commerce and Economics (Autonomous)

A.Y 2022-23
Name of the Course: Management Accounting and Auditing - I
S.Y.B.COM
Semester - III

Comparison of Income Statements of Grasim Ltd. for FY ended

31/3/20 and 31/3/21

Submitted by:

Sr. No. Full Names of the of the SAP ID Division Contact Marks
Learners Number Roll No. Number
1 Saumya Shah 45208210256 F-31 7666362767
2 Shaili Shah 45208210069 F-32 9930045034
3 Shruti Shah 45208210414 F-33 9867573584
4 Siddh Shah 45208210067 F-34 9372901057
5 Srushti Shah 45208210296 F-35 9619832696

Teacher in Charge: SHEZAD LALANI

1
 Table of Contents

Sr. Particulars Pg Done By

no. no.
1 Introduction 3 Siddh Shah
2 Advantages of Comparative 4 Siddh Shah
Income Statement
3 Steps to prepare Comparative 4 Shaili Shah
Income Statement
4 Comparative Income Statement 5-6 Srushti Shah,
Saumya Shah,

5 Comparison of Income Statement 6-7 Shaili Shah,

Saumya Shah,

6 Conclusion 8-9 Shruti Shah

7 Bibliography 9 Shruti Shah

2
 COMPARITIVE INCOME STATEMENT

Introduction
A comparative income statement is a single statement that includes columns of data from many
income statements. It enables investors to track performance over time and recognize financial
trends. Your records allow you to compare several accounting periods or you may compare and
analyze your income statement with those of other businesses.
A comparative income statement is typically divided into two or three columns. Each column
represents a fiscal period. Amounts are displayed in rows that correspond to each account. Place
the most recent year nearest the accounts on the left.
The Comparative Income Statement displays absolute values, changes in absolute values, infinite
percentage statistics, and percentage increase or decrease over the time.
There are two ways to view information and compare the data: horizontally and vertically.
Each type of analysis provides unique insights into business performance. The analyses assist
you in making sense of and identifying patterns in your comparative profit and loss statement.
Horizontal Comparative Analysis-
It is also called as ‘Time series’ analysis. Growth patterns and seasonality can be seen. Consider
the percentage change between accounting periods when calculating growth.
Vertical Comparative Analysis-
It is also called as ‘Common-size’ analysis. Determine the percentage of revenue for each line
item to compare competing businesses. Divide each line item by the total revenue to get the
percentage. To get a percentage, multiply the figure by 100. The revenue percentage indicates
how much profit you keep from each sale.

3
Advantages of Comparative Income Statement-
 It facilitates analysis of the effects of business actions on the top line and bottom line of the
organization.
 It helps in the identification of numerous trends across the periods which would otherwise
have been challenging and time-consuming because of flipping between pages.
 It helps to identify the various factors that contributed to the change over time and enable
better interpretation and analysis.
 When seeking outside funding (capital), it demonstrates how our business stacks up against
the competition.
 Comparative income statements can also show whether your expenses (cost) and income
(revenue) are consistent.
 Trends and patterns of the past are generated which help to make better decisions for the
future.
 It is very easy and simple to use this format.
 It showcases operational results of the business.

Steps to prepare Comparative Income Statement-

STEP 1-
First, give precise numbers for all items pertaining to the accounting periods under
consideration for analysis, such as cost of goods sold, net sales, selling expenses, office
expenses, etc. The comparative income statement includes these sums in Columns I and II.
STEP 2-
Find out how much the items shown in the income statement have changed in absolute terms.
By deducting the item amounts from the current year amounts, this is accomplished. Column III
of the comparative income statement contains information about this increase or decrease in
absolute amounts.
STEP 3-
Lastly, determine the percentage difference between the current year's income statement items
and the prior year. Column IV of the comparative income statement contains information on
this item % change.

4
Grasim Industries Limited
Comparative Income Statement in Vertical Form
Comparison of Profit and Loss Account for year ended 31 March 2020 and 31
March 2021
Standalone:

-------------------
Standalone Profit & Loss account in Rs. Cr. -----
--------------

Mar-21 Mar-20 Absolute percentage

Increase/Decrease increase/decrease
12 mths 12 mths

INCOME
Revenue From Operations
12,206.95 15,856.41
[Gross] -3,649.46 -29.89657531
Less: Excise/Sevice Tax/Other
0 0
Levies 0.00
Revenue From Operations [Net] 12,206.95 15,856.41 -3,649.46 -29.89657531
Other Operating Revenues 179.41 225.46 -46.05 -25.66746558
Total Operating Revenues 12,386.36 16,081.87 -3,695.51 -29.83531885
Other Income 513.68 525.61 -11.93 -2.322457561
EXPENSES 0.00
Cost Of Materials Consumed 7,291.56 10,086.02 -2,794.46 -38.32458349
Purchase Of Stock-In Trade 56.45 89.32 -32.87 -58.22852081
Operating And Direct Expenses 766.3 1,077.03 -310.73 -40.54939319
Changes In Inventories Of FG,WIP
273.86 -146.38
And Stock-In Trade 420.24 153.4506682
Employee Benefit Expenses 1,391.29 1,559.98 -168.69 -12.12471879
Finance Costs 235.95 237.88 -1.93 -0.817969909
Depreciation And Amortisation
828.17 813.51
Expenses 14.66 1.770167961
Other Expenses 1,042.58 1,280.46 -237.88 -22.81647452
Total Expenses 11,886.16 14,997.82 -3,111.66 -26.17885002

5
 Mar-21 Mar-20
12 mths 12 mths

Profit/Loss Before Exceptional,

1,013.88 1,609.66
ExtraOrdinary Items And Tax -595.78 -58.76237819
Exceptional Items -80.99 -318.03 237.04 -292.6781084
Profit/Loss Before Tax 932.89 1,291.63 -358.74 -38.45469455
Tax Expenses-Continued
Operations 0.00
Current Tax 126.64 235.49 -108.85 -85.95230575
Deferred Tax -4.2 -169.14 164.94 -3927.142857
Tax For Earlier Years 0 0 0.00
Total Tax Expenses 122.44 66.35 56.09 45.81019275
Profit/Loss After Tax And Before
810.45 1,225.28
ExtraOrdinary Items -414.83 -51.18514406
Extraordinary Items 0 0 0.00
Profit/Loss From Continuing
810.45 1,225.28
Operations -414.83 -51.18514406
Profit Loss From Discontinuing
145.44 96.49
Operations 48.95 33.65649065
Total Tax Expenses Discontinuing
50.89 33.77
Operations 17.12 33.64118687
Net Profit Loss From Discontinuing
94.55 62.72
Operations 31.83 33.66472766
Profit/Loss For The Period 905 1,288.00 -383.00 -42.32044199

Comparison of Income Statements for FY 2020 and 2021

 After the detailed understanding of the income statement it is noticed that

the revenue from operations has reduced significantly in the FY 2020-21
as compared to FY 2019-20.
 Even the other income has reduced. There is a decrease in cost of
materials consume purchases of stocking trade increase in depreciation
and amortization expense and decrease in other expenses.
 Operating and direct expenses have also reduced. There is a positive
figure seen in changes in Inventory of finished goods, work-in- progress
and stock-in-trade as compared to the previous year.

6
 The finance cost stays almost the same and has not changed much. There
is a massive drop in the profit before exceptional and extraordinary items
and tax of 59%.
 There is a decrease in the exceptional items to a considerable extent.
Profit before tax has been reduce significantly with a change of 38%
.There is an increase in the total tax expenses for the year and date 31st
March 2021.
 As there are no extraordinary items in both the financial years, the profit
after tax and before extraordinary items and the profit from continuing
operations is the same.
 There is an increase in the net profit from the discontinuing operations.
The net profit and loss for the period is reduced to ₹905 crores i.e a
reduction in the profit by 42% as compared to the financial year ending
31st March 2020.
 The majority portion of the revenue from operations is from
manufactured goods. There is a decrease in the revenue from operations
by approximately 30%.
 There is an absolute decrease in the revenue from operations of by ₹3650
crores. There is a decrease in the overall expenses by 311 crores that is a
26% drop in the total expenses.
 The decrease in the revenue, profits, expenses and the overall profit and
loss for the period can be justified due to the covid-19 pandemic. There
was decrease in the domestic as well as export revenue.
 Even though there was a reduction in the revenue and profits the
company was not much affected as compared to its peer companies due
to its diversified business.
 The company had put its entire capital expenditure on hold during the
financial year ended 2021 as the demand for its products was declining
due to the extended lockdown.
 Some of the company's plants where shut down during the lockdown and
it also incurred some costs for repair, maintenance as well as
administration. Due to the Corona pandemic the entire plan decided
could not be achieved.
 Many cost reduction techniques were adopted. It also entered into the
Paints industry.

7
 CONCLUSION

DETAILS OF THE RELATIVE PERFORMANCE OF GRASIM LTD FOR 2020-21

Grasim ltd delivered a strong performance in FY20-21 that was in part affected by the
tumultuous last few weeks of the fiscal. Grasim demonstrated extraordinary resilience in this
period of turmoil. This was partly due to its diverse business mix and the underlying soundness
of the balance sheet.
Let's look at the company's thorough performance evaluation for the years FY20–21.
In FY21 the standalone income statements of Grasim stated revenues 12,206.95 cr compared to
15,856.41 cr in FY20 which indicates that its performance is stable. Other expenses are generally
not related to the company’s main business are 1,042.58 cr in FY21 and showed an increase
which means expenses and losses from disposing of fixed asset were considered. Grasim ltd did
not record extraordinary items. The net profit loss from discontinuing operations were recorded
which means that the firms operations are divested or shut down. The depreciation and
amortization showed an increase which indicates a slight decrease in the net income. Employee
benefits refers to all forms of compensation paid by employer to employee apart from wages and
salary, which shows a slight variation compared to FY20.
And the consolidated statements of Grasim recorded revenues of Rs 797,250 m in FY21, an
increase of 0.8% over the Rs 790,703 m reported in FY20. From Rs 328,374 m in FY17 to Rs
797,250 m in FY21, Grasim's revenue increased. The revenue of Grasim has increased at a
CAGR of 24.8% during the last five years. In FY21, Grasim's net profit was Rs 67,975 m, an
increase of 11.9% from the Rs 60,764 m reported in FY20.

Grasim's Analysis of The Income Statement:

Operating income increased year over year (YoY) during the year which means that the
company’s management is generating more revenue while controlling expenses, production costs
and overheads. During the fiscal year, the company's operating profit climbed by 16.3% YoY.
Operating profit margins decreased in FY21. Finance costs declined by 16.9% YoY while
depreciation charges climbed by 0.7%. Other income increased 8.6% YoY which means the
company is generating incomes from sources other than the company’s main business such as
interest, rent and gains from the sale of fixed asset. The year's net profit increased by 11.9%
YoY. Net profit margins increased from 7.8% in FY20 to 8.6% in FY21 throughout the course of
the year.
8
Grasim’s Analysis of the Balance Sheet:
The company's current liabilities for the fiscal year (FY) 21 increased by 11.6% to Rs 520 billion
from Rs 466 billion in the prior year. The long-term debt decreased by Rs 525 billion from Rs
587 billion in FY20, or by 10.6% which shows it is becoming progressively less dependent and
could help a business in the long run. In FY21, current assets increased by 15% to reach Rs 598
billion which indicates that it is able to meet its short-term obligations, while fixed assets
increased by 8% to reach Rs 2,071 billion. Overall, the assets and liabilities totaled Rs. 2,669
billion in FY21 compared to Rs. 2,442 billion in FY20, representing a 9% increase.
This demonstrates that the business has recovered more powerfully from the global financial
crisis and has kept its long-term competitive advantage, which is the result of a carefully
calibrated strategy of client orientation, cost optimization, and product development.

BIBLIOGRAPHY

1. https://economictimes.indiatimes.com/defaultinterstitial.cms
2. https://www.google.com/search?q=.+https%3A%2F%2Fwww.equitymaster.com%2Fresearch-
it%2Fannual-results-analysis%2FGRSM%2FGRASIM-2020-21-Annual-Report-
Analysis%2F3541&rlz=1C1CHBD_enIN809IN809&oq=.+https%3A%2F%2Fwww.equitymaster
.com%2Fresearch-it%2Fannual-results-analysis%2FGRSM%2FGRASIM-2020-21-Annual-
Report-Analysis%2F3541&aqs=chrome..69i57.516j0j4&sourceid=chrome&ie=UTF-8
3. https://www.wallstreetmojo.com/comparative-income-statement/

4. . https://www.patriotsoftware.com/blog/accounting/what-is-comparative-income-statement-
example-
analysis/#:~:text=A%20comparative%20income%20statement%20combines,income%20stateme
nt%20to%20other%20companies

9
 PLAGIARISM SCAN REPORT

Date 2022-08-26

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Words 512
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Characters 3437

Content Checked For Plagiarism

COMPARITIVE INCOME STATEMENT

Introduction

A comparative income statement is a single statement that includes columns of data from many income statements. It
enables investors to track performance over time and recognize financial trends. Your records allow you to compare several
accounting periods or you may compare and analyze your income statement with those of other businesses.

A comparative income statement is typically divided into two or three columns. Each column represents a fiscal period.
Amounts are displayed in rows that correspond to each account. Place the most recent year nearest the accounts on the
left.

The Comparative Income Statement displays absolute values, changes in absolute values, infinite percentage statistics, and
percentage increase or decrease over the time.

There are two ways to view information and compare the data: horizontally and vertically.

Each type of analysis provides unique insights into business performance. The analyses assist you in making sense of and
identifying patterns in your comparative profit and loss statement.

Horizontal Comparative Analysis-

It is also called as ‘Time series’ analysis. Growth patterns and seasonality can be seen. Consider the percentage change
between accounting periods when calculating growth.

Vertical Comparative Analysis-

It is also called as ‘Common-size’ analysis. Determine the percentage of revenue for each line item to compare competing
businesses. Divide each line item by the total revenue to get the percentage. To get a percentage, multiply the figure by
100. The revenue percentage indicates how much profit you keep from each sale.

Advantages of Comparative Income Statement-

 It facilitates analysis of the effects of business actions on the top line and bottom line of the organization.

 It helps in the identification of numerous trends across the periods which would otherwise have been challenging and
time-consuming because of flipping between pages.

 It helps to identify the various factors that contributed to the change over time and enable better interpretation and
analysis.

 When seeking outside funding (capital), it demonstrates how our business stacks up against the competition.

 Comparative income statements can also show whether your expenses (cost) and income (revenue) are consistent.

 Trends and patterns of the past are generated which help to make better decisions for the future.

 It is very easy and simple to use this format.

 It showcases operational results of the business.

Steps to prepare Comparative Income Statement-

STEP 1-

First, give precise numbers for all items pertaining to the accounting periods under consideration for analysis, such as cost
of goods sold, net sales, selling expenses, office expenses, etc. The comparative income statement includes these sums in
Columns I and II.

Page 1 of 2
STEP 2-

Find out how much the items shown in the income statement have changed in absolute terms. By deducting the item
amounts from the current year amounts, this is accomplished. Column III of the comparative income statement contains
information about this increase or decrease in absolute amounts.

STEP 3-

Lastly, determine the percentage difference between the current year's income statement items and the prior year. Column
IV of the comparative income statement contains information on this item % change.

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 PLAGIARISM SCAN REPORT

Date 2022-08-29

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Characters 2700

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Comparison of Income Statements for FY 2020 and 2021

 After the detailed understanding of the income statement it is noticed that the revenue from operations has reduced
significantly in the FY 2020-21 as compared to FY 2019-20.

 Even the other income has reduced. There is a decrease in cost of materials consume purchases of stocking trade
increase in depreciation and amortization expense and decrease in other expenses.

 Operating and direct expenses have also reduced. There is a positive figure seen in changes in Inventory of finished
goods, work-in- progress and stock-in-trade as compared to the previous year.

 The finance cost stays almost the same and has not changed much. There is a massive drop in the profit before
exceptional and extraordinary items and tax of 59%.

 There is a decrease in the exceptional items to a considerable extent. Profit before tax has been reduce significantly
with a change of 38% .There is an increase in the total tax expenses for the year and date 31st March 2021.

 As there are no extraordinary items in both the financial years, the profit after tax and before extraordinary items and
the profit from continuing operations is the same.

 There is an increase in the net profit from the discontinuing operations. The net profit and loss for the period is
reduced to ₹905 crores i.e a reduction in the profit by 42% as compared to the financial year ending 31st March 2020.

 The majority portion of the revenue from operations is from manufactured goods. There is a decrease in the revenue
from operations by approximately 30%.

 There is an absolute decrease in the revenue from operations of by ₹3650 crores. There is a decrease in the overall
expenses by 311 crores that is a 26% drop in the total expenses.

 The decrease in the revenue, profits, expenses and the overall profit and loss for the period can be justified due to the
covid-19 pandemic. There was decrease in the domestic as well as export revenue.

 Even though there was a reduction in the revenue and profits the company was not much affected as compared to its
peer companies due to its diversified business.

 The company had put its entire capital expenditure on hold during the financial year ended 2021 as the demand for
its products was declining due to the extended lockdown.

 Some of the company's plants where shut down during the lockdown and it also incurred some costs for repair,
maintenance as well as administration. Due to the Corona pandemic the entire plan decided could not be achieved.

 Many cost reduction techniques were adopted. It also entered into the Paints industry.

Matched Source

No plagiarism found

Page 1 of 1
 PLAGIARISM SCAN REPORT

Date 2022-08-29

4%
96%

Words 555
Plagiarised Unique

Characters 3522

Content Checked For Plagiarism

CONCLUSION

DETAILS OF THE RELATIVE PERFORMANCE OF GRASIM LTD FOR 2020-21

Grasim ltd delivered a strong performance in FY20-21 that was in part affected by the tumultuous last few weeks of the
fiscal. Grasim demonstrated extraordinary resilience in this period of turmoil. This was partly due to its diverse business
mix and the underlying soundness of the balance sheet.

Let's look at the company's thorough performance evaluation for the years FY20–21.

In FY21 the standalone income statements of Grasim stated revenues 12,206.95 cr compared to 15,856.41 cr in FY20 which
indicates that its performance is stable. Other expenses are generally not related to the company’s main business are
1,042.58 cr in FY21 and showed an increase which means expenses and losses from disposing of fixed asset were
considered. Grasim ltd did not record extraordinary items. The net profit loss from discontinuing operations were recorded
which means that the firms operations are divested or shut down. The depreciation and amortization showed an increase
which indicates a slight decrease in the net income. Employee benefits refers to all forms of compensation paid by
employer to employee apart from wages and salary, which shows a slight variation compared to FY20

And the consolidated statements of Grasim recorded revenues of Rs 797,250 m in FY21, an increase of 0.8% over the Rs
790,703 m reported in FY20. From Rs 328,374 m in FY17 to Rs 797,250 m in FY21, Grasim's revenue increased. The revenue
of Grasim has increased at a CAGR of 24.8% during the last five years. In FY21, Grasim's net profit was Rs 67,975 m, an
increase of 11.9% from the Rs 60,764 m reported in FY20.

Grasim's Analysis Of The Income Statement:

Operating income increased year over year (YoY) during the year which means that the company’s management is
generating more revenue while controlling expenses, production costs and overheads. During the fiscal year, the
company's operating profit climbed by 16.3% YoY. Operating profit margins decreased in FY21. Finance costs declined by
16.9% YoY while depreciation charges climbed by 0.7%. Other income increased 8.6% YoY which means the company is
generating incomes from sources other than the company’s main business such as interest, rent and gains from the sale of
fixed asset. The year's net profit increased by 11.9% YoY. Net profit margins increased from 7.8% in FY20 to 8.6% in FY21
throughout the course of the year.

Grasim’s Analysis Of The Balance Sheet:

The company's current liabilities for the fiscal year (FY) 21 increased by 11.6% to Rs 520 billion from Rs 466 billion in the
prior year. The long-term debt decreased by Rs 525 billion from Rs 587 billion in FY20, or by 10.6% which shows it is
becoming progressively less dependent and could help a business in the long run. In FY21, current assets increased by 15%
to reach Rs 598 billion which indicates that it is able to meet its short-term obligations, while fixed assets increased by 8%
to reach Rs 2,071 billion. Overall, the assets and liabilities totaled Rs. 2,669 billion in FY21 compared to Rs. 2,442 billion in
FY20, representing a 9% increase.

This demonstrates that the business has recovered more powerfully from the global financial crisis and has kept its long-
term competitive advantage, which is the result of a carefully calibrated strategy of client orientation, cost optimization,
and product development.

Page 1 of 2
 Matched Source

Similarity 34%
Title:Chairman’s Letter to the Shareholders - Grasim Industries
 · Grasim demonstrated extraordinary resilience in this period of turmoil. This was largely on account of its diversified
business portfolio and the inherent Balance Sheet strength.
https://www.grasim.com/investors/whats-new/chairmans-letter-to-the-shareholders

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