Comparative statement

Meaning
Purpose
Forms of presenting comparative statement
Comparative Balance Sheet
Advantage of comparative balance sheet
Format of comparative balance sheet
Illustration
Exercise
Comparative statements of profit & loss
Objective of comparative statement of profit & loss
Format of comparative statement of profit & loss
Illustration
Exercise

1. Career point university School of Commerce & Management

2. Acknowledgement I would like to express my special thanks of gratitude to my teacher ( Pragya Bhargav Ma’am ( my mentor); Assistant professor ; school of commerce & management ) who gave me the golden opportunity to do this wonderful project on the topic ( Comparative Statement ), which also helped me in doing a lot of Research and I came to know about so many new things I am really thankful to them. Secondly I would also like to thank my parents who helped me a lot in finalizing this project within the limited time frame.

3. Comparative Statement

4. Content : Meaning Purpose Forms of presenting comparative statement Comparative Balance Sheet Advantage of comparative balance sheet Format of comparative balance sheet Illustration Exercise Comparative statements of profit & loss Objective of comparative statement of profit & loss Format of comparative statement of profit & loss Illustration Exercise

5. Meaning When financial statements figures for two or more years are placed side-by-side to facilitate comparison, these are called “comparative Financial Statements”. Such statements provide for columns to indicate the increase or decrease in these figures from one year to another in absolute figures and in percentage form.

6. Purpose of Comparative Statements To make the data simpler and more understandable. To indicate the trend of firm. To indicate the strong points & weak points of the firm. To compare the firm’s performance with average performance of the industry. To help in forecasting.

7. Forms of presenting comparative statements To show the absolute data in rupees amounts only. For e.g. revenue from operations in 2015 ₹4,00,000 and in 2016 ₹5,00,000. To show the increase and decrease in absolute data in terms of money values. For e.g. in comparison to 2015 revenue from operations in 2016 increased by 1,00,000. To show the increase and decrease in absolute data in terms of percentages. For e.g. in comparison to 2015 revenue from operation in 2016 increased by 25%.

8. Continue…. Comparison expressed by ratios. For e.g. if the trade receivables in 2016 ₹1,00,000 and in 2017 ₹2,00,00; then ratio will be = 2:1. Use of cumulative figures and averages. For e.g. land & building in 2013, 2014, 2015, 2016 and 2017 were ₹1,00,000; ₹1,50,000; ₹2,00,000; ₹1,10,000; ₹2,40,000 respectively. For e.g. average land & buildings = 1,60,000.  

9. Comparative Balance sheet The comparative balance sheet shows increases and decreases in the various assets, liabilities and in capital.

10. Advantage of comparative balance sheet A single year’s balance sheet shows only the balances of accounts on a particular date, whereas the comparative balance sheet shows not only the balances of accounts as on different dates but also extent of increase or decrease in various items of balance sheet. The balance sheet focuses on status, but the comparative focus on changes.

11. Format of comparative balance sheet It consists of five column. Such as in 1 st column = items of balance sheet 2 nd column = data of previous year 3 rd column = data of current year 4 th column = increase or decrease in absolute data in terms of rupees 5 th column = percentage of increase or decrease in absolute data. It is in the vertical form as per schedule III.

12. Comparative Balance Sheet of…… as at ….. & …. Particulars Note no. Previous Year ₹ Current Year ₹ Absolute Change (In. /De. ) ₹ % change (In./de.) % A B C = B – A D I. Equity & Liabilities : (1) Shareholder’s Funds - a. Share capital b. Reserves & surplus (2) Non current liabilities - a. long term borrowings b. long term provisions (3) Current liabilities - a. Short term borrowings b. Trade payables c. Other current liabilities d. Short term provisions Total

13. A ₹ B ₹ C = B - A ₹ D % II. Assets (1) Non current assets - a. Fixed assets (i). Tangible assets (ii). Intangible assets b. Non-current Investments c. Long-term loans & advances (2) Current assets - a. Current investments b. Inventories c. Trade receivables d. Cash & Cash equivalents e. Short-term loans & advances f. Other Current assets Total Continue…

14. Y Ltd. Was in the business of manufacturing plastic bags. The company decided to manufacture low cost jute bags instead of plastic bags. Following are the balance sheets of Y Ltd. As at 31 st march, 2015 & 2016. Prepare a comparative balance sheet. Particulars Note No. 31-3-16 ₹ 31-3-15 ₹ I. Equity & Liabilities : (1) Shareholder’s Funds- a. Share Capital 10,00,000 8,00,000 b. Reserves & surplus 4,00,000 3,00,000 (2) Non-current liabilities- a. long-term borrowings 2,00,000 3,00,000 (3) Current liabilities 4,00,000 5,00,000 Total 20,00,000 19,00,000 II. Assets : (1) Non-current assets - a. Fixed assets 15,00,000 12,00,000 (2) Current assets 5,00,000 7,00,000 Total 20,00,000 19,00,000

15. Particulars Note no. 31-3-15 (₹) 31-3-16 (₹) Absolute changes (₹) % Change (%) A B C = B-A D= C A×100 I. Equity & Liabilities : (1) Shareholder’s Funds a. Share Capital 8,00,000 10,00,000 2,00,000 25% b. Reserves & surplus 3,00,000 4,00,000 1,00,000 33.33% (2) Non-current liabilities - a. Long-term borrowings 3,00,000 2,00,000 (1,00,000) (33.33%) (3) Current liabilities 5,00,000 4,00,000 (1,00,000) (20%) Total 19,00,000 20,00,000 1,00,000 5.2% II. Assets (1) Non-current assets - a. Fixed assets 12,00,000 15,00,000 3,00,000 25% (2) Current assets 7,00,000 5,00,000 (2,00,000) (28.7%) Total 19,00,000 20,00,000 1,00,000 5.2% Comparative Balance Sheet of Y Ltd…… as at 31 st march 2015 & 2016

16. Notes Bracket denotes negative sign. D = C  A × 100. So, × 100 = 25%.  

17. 2.From the following information prepare comparative balance sheet of Hindu Ltd. : Particulars 31-3-17 31-3-16 ₹ ₹ Reserves & Surplus 12,00,000 6,00,000 Share Capital 10,00,000 10,00,000 Trade payables 12,70,000 9,00,000 Land & buildings 16,00,000 15,00,000 Plant & machinery 6,30,000 5,00,000 Goodwill NIL 5,00,000 Investments 1,20,000 1,00,000 Current Assets 15,20,000 8,00,000 Long term borrowings 4,00,000 5,00,000 Note :- if in any question the proper balance sheet is not given so first prepare the balance sheet then solve the question.

18. Balance sheet of H indu Ltd. As at 31 st march 2016 & 2017 Particulars Note no. 31-3-17 ₹ 31-3-2016 ₹ I. Equity & liabilities : (1) Shareholder’s Funds - a. Share Capital 10,00,000 10,00,000 b. Reserves & surplus 12,00,000 6,00,000 (2) Non current liabilities - a. Long-term borrowings 4,00,000 5,00,000 (3) Current liabilities - a. Trade payables 12,70,000 9,00,000 Total 38,70,000 30,00,000 II. Assets (1) Non current assets a. Fixed assets i). Tangible assets 22,30,000 20,00,000

19. Continue…. ii). Intangible assets NIL 1,00,000 b. Investments 1,20,000 1,00,000 (2) Current assets 15,20,000 8,00,000 Total 38,70,000 30,00,000 Notes :- 1. Tangible assets = 31-3-17 31-3-17 Land & Buildings 16,00,000 15,00,000 Plant & Machinery 6,30,000 5,00,000 22,30,000 20,00,000 2. Intangible assets = Goodwill 1,00,000 NIL

20. Comparative Balance sheet of Hindu Ltd. As at 31 st march 2016 & 2017 Particulars Note no. 31-3-16 ₹ 31-3-17 ₹ Absolute change ₹ % Change % A B C =B-A D= C A×100 I. Equity & Liabilities : (1) Shareholder’s Funds a. Share capital 10,00,000 10,00,000 NIL NIL b. Reserves & Surplus 6,00,000 12,00,000 6,00,000 100% (2) Non current liabilities a. Long term borrowings 5,00,000 4,00,000 (1,00,000) (20%) (3) Current liabilities a. Trade payables 9,00,000 12,70,000 3,70,000 41.11% Total 30,00,000 38,70,000 8,70,000 29% II. Assets : (1) Non current assets a. Fixed assets

21. Continue ….. i). Tangible assets 20,00,000 22,30,000 2,30,000 11.50% ii). Intangible assets 1,00,000 NIL (1,00,000) (100%) b. Investments 1,00,000 1,20,000 20,000 20% (2) Current assets 8,00,000 15,20,000 7,20,000 90% Total 30,00,000 38,70,000 8,70,000 29% Note : Bracket denotes negative sign.

22. Exercise (Do it yourself) Particulars Note no. 31-3-2014 ₹ 31-3-13 ₹ I. Equity & Liabilities : (1) Shareholder’s Funds - a. Share capital 8,00,000 4,00,000 b. Reserves & Surplus 1,00,000 1,00,000 (2) Non current liabilities - a. Long term borrowings 5,00,000 4,00,000 (3) Current liabilities - a. Short term borrowings 1,00,000 1,00,000 Total 15,00,000 10,00,000 II. Assets (1) Non current assets 7,00,000 5,00,000 (2) Current assets a. Inventories 4,00,000 3,00,000 1. From the following balance sheet of Royal Industries as at 31 st march 2013 & 2014, prepare a comparative balance sheet :-

23. Continue…… b. Trade receivables 2,00,000 1,00,000 c. Cash & cash equivalents 2,00,000 1,00,000 Total 15,00,000 10,00,000

24. 2. From the following information, prepare a comparative balance sheet : Particulars 31-3-15 ₹(in lakh) 31-3-14 ₹(in lakh) Share capital 25 25 Reserves & surplus 10 8 Goodwill 3 2 Land & Buildings 20 15 Plant & machinery 10 15 Long term borrowings 3 2 Investments 2 1 Trade payables 1 1 Short term provisions 1 2 Current assets 5 5

25. Comparative Statement of Profit & Loss A comparative statement of profit & loss shows the net profits or loss for number of years so that changes in absolute in terms of money as well as in terms of percentage may be known.

26. Comparative statement of profit & loss provides the following information :- Rate of increase or decrease in revenue from operations (sales). Rate of increase or decrease in cost of materials consumed. Rate of increase or decrease in incomes and expenses. Rate of increase or decrease in net profit.

27. Objectives of comparative statement of profit & loss To facilitate comparison of various items of income & expenditure for two or more years. To analyse the increase or decrease in the income & expenditure in terms of rupee and also in percentage from one year to another. To analyse the increase or decrease in the profits of the enterprise. To help in forecasting the profitability of the business concern.

28. Format of comparative statement of profit & loss It consists of five column :- 1 st column = particulars 2 nd column = previous year data 3 rd column = current year data 4 th column = increase or decrease in absolute data 5 th column increase or decrease in various items in the form of percentage. It is in the vertical form as per schedule III.

29. Comparative Statement of profit & loss of ……. For the year ended ……& ……. Particulars Note no. Pervious year (₹) Current year (₹) Absolute change (₹) % change (%) A B C D I. Revenue from operation II. Add : Other income III. Total revenue (I + II) IV. Less : Expenses – cost of materials consumed purchase of stock -in-trade change in inventories of F.G., WIP, stock-in-trade employee benefit expenses finance costs depreciation and amortization exp. other expenses Total expenses

30. Continue….. V. Profit before tax (III – IV) VI. Less : Tax VII. Profit after tax (V - VI)

31. Illustration Particulars 31-3-15 ₹ 31-3-16 ₹ I. Revenue from operation 10,00,000 12,00,000 II. Add : Other income 3,00,000 5,00,000 III. Total Revenue (I + II) 13,00,000 17,00,000 IV. Less : Expenses Cost of material consumed 5,00,000 6,00,000 Depreciation & amortization expenses 10,000 20,000 V. Profit before tax (III - IV) 7,90,000 10,80,000 1. F rom the following information, prepare the comparative statement of profit & loss :- Note :- tax on profit is 50%.

32. Sol: comparative statement of profit & loss for the year ended 31 st march 2015 & 2016 Particulars Note no. 31-3-15 (₹) 31-3-16 (₹) Absolute change (₹) % change (%) A B C D I. Revenue from operation 10,00,000 12,00,000 2,00,000 20% II. Add : Other income 3,00,000 5,00,000 2,00,000 66.67% III. Total revenue (I + II) 13,00,000 17,00,000 4,00,000 30.67% IV. Less : Expenses cost of material consumed 5,00,000 6,00,000 1,00,000 20% depreciation & amortization expenses 10,000 20,000 10,000 100% V. Profit before tax (III - IV) 7,90,000 10,80,000 2,90,000 36.70% VI. Tax (50%) 3,95,000 5,40,000 1,45,000 36.70% VII. Profit after tax (V - VI) 3,95,000 5,40,000 1,45,000 36.70%

33. Exercise (Do It Yourself) Particulars Note no. 31-12-16 ₹ 31-12-17 ₹ I. Revenue from operations 20,00,000 22,00,000 II. Less : Expenses : cost of materials consumed 7,00,000 6,00,000 finance cost 10,000 20,000 Total expenses 7,10,000 6,20,000 III. Profit before tax (I - II) 12,90,000 15,80,000 IV. Tax (45%) 5,80,500 7,11,000 VI. Profit before tax 7,09,500 8,69,000 1. Prepare a comparative statement of profit & loss from the following information :-

34. Thank You

35. Presented by : Yamini Kahaliya BBA (honors’)