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Comparitive

The document provides comparative financial statements for two years (2011 and 2012) for a company. It includes a comparative income statement showing sales, costs, expenses, and profits for each year. It also includes a comparative balance sheet showing assets, liabilities, and equity for 2011 and 2012. The document analyzes the profitability based on the comparative income statement, noting that while sales grew 20%, operating profit only grew 13% due to disproportionate increases in operating expenses reducing profitability. It prepares another comparative income statement and balance sheet for years 2017 and 2018 for company PQ Ltd and comments on its liquidity and solvency.

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sanath vs
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58 views6 pages

Comparitive

The document provides comparative financial statements for two years (2011 and 2012) for a company. It includes a comparative income statement showing sales, costs, expenses, and profits for each year. It also includes a comparative balance sheet showing assets, liabilities, and equity for 2011 and 2012. The document analyzes the profitability based on the comparative income statement, noting that while sales grew 20%, operating profit only grew 13% due to disproportionate increases in operating expenses reducing profitability. It prepares another comparative income statement and balance sheet for years 2017 and 2018 for company PQ Ltd and comments on its liquidity and solvency.

Uploaded by

sanath vs
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Comparative financial Statements.

Financial statement of the current year is compared with that


of the previous to find out the changes of each item in terms
of actual value and also in terms of percentage.
Comparative Income statement.
Each item in the income statement of the current year is
compared with that of the previous year to find out the
absolute change and the percentage change and also the
increase or decrease of each item over the last year.
Comparative Balance Sheet.
Each item in the B/S of the current year is compared
with that of the previous year to find out the absolute change
and the percentage change and also the increase or decrease
of each item and the total over the last year.

Comparative Income statement.


Particulars 2011 2012 Absolute % Change.
Change.
Sales 100000 80000 - 20000 -20
Cost of goods sold 60000 40000 - 20000 - 33
Gross profit 40000 40000 0 0
Operating expenses 20000 14000 - 6000 - 30
Net profit 20000 26000 6000 30
% change = Amt. of change x 100/ Base year value.
Comparative Balance Sheet.
Particulars 2011 2012 Amt. % Change.
Equity capital 400000 600000 200000 50
Debentures 200000 325000 125000 62.25
Current liabilities 262000 127000 135000 - 52
Total 862000 1052000 190000 22
Plant & machinery 100000 200000 100000 100
Land & Building 360000 540000 180000 50
Investments 270000 170000 100000 - 37
Debtors 100000 88000 - 12000 - 12
Cash at bank 32000 54000 22000 69
Total 862000 1052000 190000 22.

Q 1. The following are the P&L a/c of AB Ltd. Prepare a


comparative Income statement and comment about the
profitability.
Particulars 2011 2012
Sales 1000000 1200000
Operating expenses 550000 690000
Administration & selling 80000 120000
Interest expense 20000 30000
Comparative Income statement.
Particulars 2011 2012 Amt. % change.
Sales 1000000 1200000 200000 20
Cost of sales 550000 690000 140000 25
Operating profit 450000 510000 60000 13
Admn,&selling 80000 120000 40000 50
Interest 20000 30000 10000 50
Net profit 350000 360000 10000 2.85
Operating profit.
Sales in 2012 increased by 20% when compared to 2011, and
a 20% growth in sales is really good. But the operating profit
is increased only by 13% the reason being disproportionate
increase in the operating expenses.
Net profit.
Inspite of the increase of sales by 25%, increase in net profit
is only close to 3%. Sales increased by 20% but operating cost
and Admin. and selling as well as interest expenses increased
disproportion to the increase in sales which finally brought
down the net profit.
Therefore the company should seriously analyse the cost
components item wise in detail and should take all
appropriate measures to bring down the cost to sustain the
profitability.
Q2. The Balance Sheets of PQ Ltd.
Particulars 2017 2018
Assets.
Non- current asset.
Property plant, equipment 9852 10569
Goodwill, other intangibles 00 130
Investments, loans 15339 12012
Other financial assets 7012 9176
Total 32203 31787
Current assets.
Investments 9643 5906
Trade receivable 10960 12151
Cash and cash equivalents 19153 16770
Loans, other financial assets 7926 9263
Total 47682 42565
Total Assets 79885 75877

Equity and Liabilities.


Equity share capital 1148 1092
Other equity 66869 62410
Total Equity 68017 63502
Non- current Liabilities 82 713
Current liabilities 11786 11662
Total equity and liability 79885 75877.
Prepare a comparative balance Sheet and comment about
the liquidity and solvency of the company.
Comparative Balance Sheet.
Particulars 2017 2018 Amt. % change
Assets
Property, plant 9852 10569 717
Godwill, intangible 00 130 130
Investments, loans 15339 12012 - 3327
Other financial asset 7012 9176 2164
Total 32203 31787 -416
Current assets.
Investments 9643 5906 -3737
Trade receivable 10960 12151 -1191
Cash 19153 16670 -2483
Loans 7926 9263 1337
Total 47682 42565 -5117

Total Assets 79885 75877. -4008


Equity and liability,
Equity capital 1148 1092 -56
Other equity 66869 62410 -4459
Total Equity 68017 63502 -4515
Non- current liability 82 713 631
Current liability 11786 11662 -124

Total equity, liability79885 75877. -4008

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