Preparation of common-size statements

Preparation of common-size statements

Common-size statement can be prepared with three columns. Following are the steps to be followed in preparation of common-size statement:

(i) Column 1: In this column, particulars of items of income statement or balance sheet are written.

(ii) Column 2: Enter absolute amount.

(iii) Column 3: Choose a common base as 100. For example, revenue from operations can be taken as the base for income statement and total of balance sheet can be taken as the base for balance sheet. Work out the percentage for all the items of column 2 in terms of the common base and enter them in column 3.

Format of common-size statement

Illustration 6

From the following particulars of Kumar Ltd, prepare a common-size income statement for the year ended 31st March, 2018.

Solution

Common-size income statement of Kumar Ltd for the year ended 31st March, 2018

Note: Computation of percentage for other income

[20,000/ 5,00,000] x 100 = 4%

Illustration 7

From the following particulars of Mani Ltd an Kani Ltd prepare a common-size income statement for the year ended 31st March, 2019.

Solution

Common-size income statement for the year ended 31st March, 2019

Illustration 8

From the following particulars of Siva Ltd, prepare common size income statement for the years ended 31st March, 2016 and 31st March, 2017.

Solution

Common–size income statement of Siva Ltd for the year ended 31st March, 2016 and 31st March, 2017

Illustration 9

Prepare common-size balance sheet of Maria Ltd. as on 31st March, 2018.

Solution

Illustration 10

Prepare common-size balance sheet of Sharmila Ltd. and Sangeetha Ltd. as on 31st March, 2019.

Solution

Common-size balance sheet of Sharmila Ltd and Sangeetha Ltd as on 31st March, 2019

Illustration 11

Prepare common-size statement of financial position of Saleem Ltd as on 31st March, 2017 and 31st March, 2018.

Solution

Common-size balance sheet of Saleem Ltd as on 31st March, 2017 and 31st March, 2018