Question

(a) Give any two objectives of preparing Common Size Statements.

(b) From the following data, prepare a Comparative Statement of Profit and Loss of Simon Ltd.

Particulars — 31.03.2014 — 31.03.2013

(i) Reyenue from Operations — Rs 15,00,000 — Rs 12,00,000 

(ii) Other Income — Rs 30,000 — Rs 20,000 

(iii) Cost of Materials consumed — Rs 7.00.000 — Rs 5,50.000

(c) From the following data, prepare Common Size Balance Sheet of Mini Lid.

Particulars — 31.03.2014 — 31.03.2013

(i) Share Capital — Rs 1,50,000 — Rs 1,20,000 

(ii) Reserves and Surplus — Rs 30,000 — Rs 30,000 

(iii) Trade Payables — Rs 20.000 — Rs 40,000 

(iv) Fixed Tangible Assets — Rs 2,00,000 — Rs 1,90,000

Answer 1

(a) Objectives of preparing common size statements. 

• Common size statement is a financial tool for studying key changes and trends in financial position. 

• Comparison of company’s position with the related industry as a whole is possible with the help of common size statement.