Posts Tagged ‘Ratio’
Specimen of Comparative and Common size P&L and B/S, and Ratio Analysis
COMPARATIVE INCOME STATEMENT
Particulars
Previous Year
Current Year
Increase or decrease
Amount
Percentage
Net Sales/ Sales (Gross sales – Sales Returns)
Less: Cost of Goods Sold
Raw materials
Direct Wages/ Labor
Direct / Manufacturing expenses
Add: Opening stock of Finished Goods
Less: Closing stock of Finished Goods
Gross Profit
Less: Operating Expenses
Administration Expenses
Selling and Distribution Expenses
Operating Profit
Add: Non-trading/ Non-operating Income (dividend, interest etc)
Less: Non-trading/ Non-operating Expenses
Income or Earnings Before Interest and Tax
Less: Interest on Debentures/ Bonds
Net income of Earnings Before Tax
Less: Tax
Income or Profit After Tax
COMMONSIZE INCOME STATEMENT
Particulars
Previous Year
Current Year
Amount
Percentage
Amount
Percentage
Net Sales/ Sales (Gross sales – Sales Returns)
Less: Cost of Goods Sold
Raw materials
Direct Wages/ Labor
Direct / Manufacturing expenses
Add: Opening stock of Finished Goods
Less: Closing stock of Finished Goods
Gross Profit
Less: Operating Expenses
Administration Expenses
Selling and Distribution Expenses
Operating Profit
Add: Non-trading/ Non-operating Income (dividend, interest etc)
Less: Non-trading/ Non-operating Expenses
Income or Earnings Before Interest and Tax
Less: Interest on Debentures/ Bonds
Net income of Earnings Before Tax
Less: Tax
Income or Profit After Tax
COMPARATIVE BALANCE SHEET
Particulars
Previous Year
Current Year
Increase or decrease
Amount
Percentage
ASSETS
Current Assets
Cash / Bank
Stock/ Inventory
Debtors
Bills Receivable
Prepaid Expenses
Total Current Assets (A)
Fixed Assets
Land & Buildings
Plant & Machinery
Furniture & Fittings
Total Fixed Assets (B)
Total Assets (A + B)
LIABILITIES
Current Liabilities & Provisions
Creditors
Bills Payable
Outstanding Expenses
Provisions
Total Current Liabilities (C)
Long – Term Liabilities
Debentures/ Bonds/ Bank Loan
Total Long-Term Liabilities (D)
Capital and Reserves
Share Capital
Reserves and Surplus
Retained Earnings
Total Shareholders Funds (E)
Total liabilities and Capital(C+D+E)
Problem 1:
The following are the income statements of X Ltd., for the year ending 31.12.2008 and 2007. You are required to prepare a comparative income statement for the two years.
31.12.2007 31.12.2008
Net Sales 10,00,000 12,00,000
Cost of Goods Sold (CGS) 5,50,000 6,05,000
Operating expenses
Administration 80,000 1,00,000
Selling 60,000 80,000
Non-Operating Expenses
Interest 40,000 50,000
Income – Tax 50,000 80,000
RATIO ANALYSIS
A ratio us a mathematical relationship between two items expressed in a quantitative form. Basically ratios can be classified as
Profitability ratio
Turnover ratio
Solvency ratio
PROFITABILITY RATIO
FORMULA
EXPLANATION
1. Return on Investment (or) Overall Profitability ratio
Operating Profit
R.O.I = ————————- x 100
Capital Employed
Operating Profit = Profit before interest and tax
Capital Employed = Total Assets (or) Total Fixed Assets (or) Net Working Capital (or) Share Capital + Reserves and Surplus + Long term Loans) – (Non business assets – Fictitious Assets)
a. Return on Shareholders
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