CHAPTER 2

2. DATA ANALYSIS AND INTERPRETATION

2.1 COMPARATIVE STATEMENT
The comparative financial statements are statement of the financial position at
different periods of time. The elements of financial position are shown in a
comparative form so as to give an idea of financial position at two or more
periods. Any statement prepared in a comparative form will be covered in
comparative statement. From practical point of view generally two financial
statements are prepared in comparative form for financial analysis purposes. Not
only the comparison of the figure of two periods but also be relationship
between Balance sheet and income statement enables an in-depth study of financial
position and operative results. The comparative statement may show:

1. Absolute figure
2. Change in absolute figure
3. Absolute data in terms of percentages.
4. Increase or decrease in terms of percentage.

20

COMPARITIVE STATEMENT ANALYSIS OF INCOME STATEMENT IN

2008-2009

TABLE NO.1
2009

Increase/Decrease

Percentage

(in Rs)

(in Rs)

(in Rs)

(%)

Net sales

89236186

100842845

11606659

13

Less: cost of
goods sold

72542038

81038372

8496334

12

Gross profit

16694148

19804473

3110325

19

Less: operating
expenses

73711396

87979457

14268061

19

operating
profit

57017248

68174984

11157736

20

Less: interest

2890180

3478943

588763

20

Net profit
before tax

59907428

11653927

-48253501

-81

Less: Income
tax

1427342

1998390

571048

40

Net profit after

tax

61334770

73652317

12317547

20

Particulars

2008

1. Sales have been increased by 13% and cost of goods by 12% so overall
gross profit has been increased by 19%.
2. Although operating expenses have increased by 19% the increase in gross
profit is sufficient to compensate for the increase in operating expenses and
hence there has been an overall increase in operational profits by 20%.
3. There is an increase in net profit after tax amount increased by 20%.
4. It may be concluded that there is a sufficient progress in the company and the
overall profitability of the company is good.

21

COMPARITIVE STATEMENT ANALYSIS OF INCOME STATEMENT IN

2009-2010
TABLE NO.2
2009

2010

Increase/Decrease

Percentage

(in Rs)

(in Rs)

(in Rs)

(%)

Net sales

100842845

86661383

-14181462

-14

Less: cost of
goods sold

81038372

72313172

-8725200

-11

Gross profit

19804473

14348211

-5456262

-28

Less: operating
expenses

87979457

65361862

-22617595

-26

operating profit

68174984

51013651

-17161333

-25

Less: interest

3478943

2845409

-633534

-18

Net profit before

tax

11653927

53859060

42205133

362

Less :Income tax

1998390

614910

-1383480

-69

Net profit after

tax

73652317

54473970

-19178347

-26

Particulars

1. Sales have been decreased by 14% and cost of goods by 11% so overall
gross profit has been decreased by 28%.
2. Although operating expenses have decreased by 26% the decrease in gross
profit is not sufficient to compensate for the operating expenses and hence
there has been an overall decrease in operational profits by 25%.
3. There is an decrease in net profit after tax amount decreased by 26%.
4. It may be concluded that there is not sufficient progress in the company and
the overall profitability of the company is not good.

22

COMPARITIVE STATEMENT ANALYSIS OF INCOME STATEMENT IN

2010-2011
TABLE NO.3
2010

2011

(in Rs)

(in Rs)

(in Rs)

(%)

Net sales

86661383

23819842

-62841541

-73

Less: cost of goods

sold

72313172

19160003

-53153169

-74

Gross profit

14348211

4659839

-9688372

-68

Less: operating
expenses

65361862

17568585

-47793277

-73

operating profit

51013651

12908746

-38104905

-75

Less: Interest

2845409

2472542

-372867

-13

Net profit before tax

53859060

15381288

-38477772

-71

Less: Income tax

614910

135519

-479391

-78

Net profit after tax

54473970

15516807

-38957163

-72

Particulars

Increase/Decrease Percentage

1. Sales have been decreased by 73% and cost of goods by 74% so overall
gross profit has been decreased by 68%.
2. Although operating expenses have decreased by 73% the decrease in gross
profit is not sufficient to compensate for the operating expenses and hence
there has been an overall decrease in operational profits by 75%.
3. There is an decrease in net profit after tax amount decreased by 72%.
4. It may be concluded that there is not sufficient progress in the company and
the overall profitability of the company is not good.

COMPARITIVE STATEMENT ANALYSIS OF INCOME STATEMENT IN

23

2011-2012
TABLE NO.4
2011

2012

Increase/Decrease

Percentage

(in Rs)

(in Rs)

(in Rs)

(%)

Net sales

23819842

73083064

49263222

207

Less :cost of
goods sold

19160003

58682221

39522218

206

Gross profit

4659839

14400843

9741004

209

Less: operating
expenses

17568585

62472872

44904287

256

operating profit

12908746

48072029

35163283

272

Less: Interest

2472542

2222488

-250054

-10

Net profit before

tax

15381288

50294517

34913229

227

Less: Income tax

135519

61343

-74176

-55

Net profit after

tax

15516807

50355860

34839053

225

Particulars

1. Sales have been increased by 207% and cost of goods by 206% so

overall gross profit has been increased by 209%.
2. Although operating expenses have increased by 256% the increase in gross
profit is sufficient to compensate for the increase in operating expenses and
hence there has been an overall increase in operational profits by 272%.
3. There is an increase in net profit after tax amount increased by 225%.
4. It may be concluded that there is a sufficient progress in the company and the
overall profitability of the company is good.

COMPARITIVE STATEMENT ANALYSIS OF BALANCE SHEET IN 20082009

24

5. TABLE NO.5
2008

2009

Increase/Decrease

Percentage

(in Rs)

(in Rs)

(in Rs)

(%)

Gross Block

23226117

23670944

444827

Less: Depreciation

15203154

16296953

1093799

Net Block

8022963

7373991

-648972

-8

Inventories

4518437

12550700

8032263

178

Sundry Debtors

21037887

18421857

-2616030

-12

Cash and Bank Balance

1428974

1122303

-306671

-21

Loan and Advances

58656536

53500592

-5155944

-9

Total Current Assets

85691834

85595152

-96682

-0.01

Total Assets

93714797

92969143

-745654

-1

Shareholders Funds

24562311

27279548

2717237

11

current Liabilities

67855615

63830030

-4025585

-6

Provisions

1296871

1859565

562694

43

Total Liabilities

93714797

92969143

-745654

-1

Particulars
Fixed Assets:

Current Assets:

Liabilities:

Current assets have been decreased by 0.1% than liabilities by 6%.i.e.

current asset are less than current liabilities. Fixed assets have been decreased by
nearly 8% and overall assets have been decreased by 1%. Capital has been
increased by 11% and loan creditors have been increased by 15%. It indicates
fund flow of management is poor. Overall financial position of the company is
not satisfactory in this year.

COMPARITIVE STATEMENT ANALYSIS OF BALANCE SHEET IN 20092010

TABLE NO.6

Particulars

2009

2010
25

Increase/Decrease

Percentage

(in Rs)

(in Rs)

(in Rs)

(%)

Gross Block

23670944

26932047

3261103

14

Less: Depreciation

16296953

17671382

1374429

Net Block

7373991

9260665

1886674

26

Inventories

12550700

4534267

-8016433

-64

Sundry Debtors

18421857

2045393

-16376464

-89

Cash and Bank Balance

1122303

2469238

1346935

120

Loan and Advances

53500592

30665425

-22835167

-43

Total Current Assets

85595152

39714323

-45880829

-53.6

Total Assets

92969143

48974988

-43994155

-47

Shareholders Funds

27279548

44491891

17212343

63

current Liabilities

63830030

4133455

-59696575

-94

Provisions

1859565

349642

-1509923

-81

Total Liabilities

92969143

48974988

-43994155

-47

Fixed Assets:

Current Assets:

Liabilities:

Current assets have been decreased by 53.6% than liabilities by 94% i.e.
current asset are less than current liabilities. Fixed assets have been increased by
nearly 26% and overall assets have been decreased by 47%. Capital has been
increased by 63% and loan creditors have been increased by %11. It indicates fund
flow of management is poor. Overall financial position of the company is not
satisfactory in this year.

COMPARITIVE STATEMENT ANALYSIS OF BALANCE SHEET IN 20102011

TABLE NO.7

Particulars

2010

2011

Increase/Decrease

Percentage

(in Rs)

(in Rs)

(in Rs)

(%)

Fixed Assets:
26

Gross Block

26932047

27629127

697080

Less: Depreciation

17671382

19298304

1626922

Net Block

9260665

8330823

-929842

-10

Inventories

4534267

2656055

-1878212

-41

Sundry Debtors

2045393

6296173

4250780

208

Cash and Bank Balance

2469238

6630616

4161378

169

Loan and Advances

30665425

22007320

-8658105

-28

35233

35233

48974988

45956219

-3018769

-6

Shareholders Funds

44491891

38004166

-6487725

-15

current Liabilities

4133455

7952053

3818598

92

Provisions

349642

-349642

-100

Total Liabilities

48974988

-3018769

-6

Current Assets:

Deferred Tax
Total Assets
Liabilities:

45956219

Current assets have been decreased by 5% than liabilities increased by

92% i.e. current asset are less than current liabilities. Fixed assets have been
decreased by nearly 10% and overall assets have been decreased by 6%.Capital
has been increased by 15% and loan creditors have been increased by 3%.It
indicates fund flow of management is poor. Overall financial position of the
company is not satisfactory in this year.

COMPARITIVE STATEMENT ANALYSIS OF BALANCE SHEET IN 20112012

TABLE NO.8
2011

2012

Increase/Decrease

Percentage

(in Rs)

(in Rs)

(in Rs)

(%)

Gross Block

27629127

29686910

2057783

Less: Depreciation

19298304

20723713

1425409

Particulars
Fixed Assets:

27

Net Block

8330823

8963197

632374

Inventories

2656055

6565637

3909582

147

Sundry Debtors

6296173

3521893

-2774280

-44

Cash and Bank

Balance

6630616

8322361

1691745

26

Loan and Advances

22007320

14487710

-7519610

-34

Deferred Tax

35233

96576

61343

174

Total Assets

45956219

41957373

-3998846

-9

Shareholders Funds

38004166

33802977

-4201189

-11

current Liabilities

7952053

8154396

202343

45956219

41957373

-3998846

-9

Current Assets:

Liabilities:

Provisions
Total Liabilities

Current assets have been decreased by 12% than liabilities increas ed by

3% i.e. current assets are less than current liabilities. Fixed assets have been
increased by nearly 8% and overall assets have been decreased by 9%.Capital has
been increased by 11% and loan creditors have been increased by 18%.It
indicates fund flow of management is poor. Overall financial position of the
company is not satisfactory in this year.

2.2 COMMON-SIZE STATEMENT

The common-size statements, Balance sheet and income statement are
shown in analytical percentages. The figures are shown as percentages of total
assets, total liabilities and total sales. The total assets are taken as 100 and
different assets are expressed as a percentage of the total. Similarly, various
liabilities are taken as particulars of total liabilities. These statements are also
known as component percentage or 100 -percentage statement because every
individual item is stated as a percentage of 100. The shortcomings in
comparative statement and trend percentages where changes in items could not
28

be compared with the totals have been covered up. The analyst is able to assess the
figure in relation to total values. The common-size statement may be prepared in
the following way.
1. The totals of assets or liabilities are taken as 100.
2. The individual assets are expressed as percentage of total assets.
COMMON SIZE INCOME STATEMENT IN 2008-2012
TABLE NO.9
Particulars

2008
(in Rs)

Percentage
(%)

2009
(in Rs)

Percentage
(%)

Net sales

89236186

145.49

100842845

136.92

Less: cost of goods

sold

72542038

118.27

81038372

110.03

Gross profit

16694148

27.22

19804473

26.89

Less: operating
expenses

73711396

120.18

87979457

119.45

operating profit

57017248

92.96

68174984

92.56

Less: Interest

2890180

4.71

3478943

4.72

Net profit before tax

59907428

97.67

11653927

15.82

Less: Income tax

1427342

2.33

1998390

2.71

Net profit after tax

61334770

100.00

73652317

100.00

29

Particulars

2010
(in Rs)

Percentage
(%)

2011
(in Rs)

Percentage
(%)

2012
(in Rs)

Percentage
(%)

Net sales

86661383

159.09

23819842

153.51

73083064

145.13

Less: cost
of goods
sold

72313172

132.75

19160003

123.48

58682221

116.54

Gross
profit

14348211

26.34

4659839

30.03

14400843

28.60

Less:
operating
expenses

65361862

119.99

17568585

113.22

62472872

124.06

operating
profit

51013651

93.65

12908746

83.19

48072029

95.46

Less:
Interest

2845409

5.22

2472542

15.93

2222488

4.41

Net profit
before tax

53859060

98.87

15381288

99.13

50294517

99.88

Less:
Income tax

614910

1.13

135519

0.87

61343

0.12

Net profit
after tax

54473970

100.00

15516807

100.00

50355860

100.00

Nearly 118%, 110%, 132%, 123% and 116% is spent on cost of goods sold
which results in 27%, 27%, 26%, 30% and 28% in gross profit for the years
2008-2012.

Operating expenses have fluctuating to 2% and also operating profit has

fluctuation.

Net profit before tax has been increased to 99.8% from 97.67%.

Comparing all the five years (2008-2012) company growth was good and
satisfactory.

COMMON SIZE STATEMENT OF BALANCE SHEET IN 2008-2012

30

TABLE NO.10
2008
(in Rs)

Percentage
(%)

2009
(in Rs)

Percentage
(%)

Gross Block

23226117

24.78

23670944

25.46

Less: Depreciation

15203154

16.22

16296953

17.53

Net Block

8022963

8.56

7373991

7.93

Inventories

5518437

5.89

12550700

13.50

Sundry Debtors

21037887

22.45

18421857

19.82

Cash and Bank Balance

1428974

1.52

1122303

1.21

Loan and Advances

58656536

62.59

53500592

57.55

93714797

100.00

92969143

100.00

Shareholders Funds

24562311

26.21

27279548

29.34

current Liabilities

67855615

72.41

63830030

68.66

Provisions

1296871

1.38

1859565

2.00

Total Liabilities

93714797

100.00

92969143

100.00

Particulars
Fixed Assets:

Current Assets:

Deferred Tax
Total Assets
Liabilities:

2010
(in Rs)

Percentage
(%)

2011
(in Rs)

Percentage
(%)

31

2012
(in Rs)

Percentage
(%)

26932047

54.99

27629127

60.12

29686910

70.75

17671382

36.08

19298304

41.99

20723713

49.39

9260665

18.91

8330823

18.13

8963197

21.36

4534267

9.26

2656055

5.78

6565637

15.65

2045393

4.18

6296173

13.70

3521893

8.39

2469238

5.04

6630616

14.43

8322361

19.84

30665425

62.61

22007320

47.89

14487710

34.53

35233

0.08

96576

0.23

48974988

100.00

45956219

100.00

41957373

100.00

44491891

90.85

38004166

82.70

33802977

80.57

4133455

8.44

7952053

17.30

8154396

19.43

349642

0.71

48974988

100.00

45956219

100.00

41957373

100.00

Comparing all the five years working capital of management was efficient in
2010.
Working capital has increased trend in first three years, and then decreased. It
is not good sign of the company.
Last three years current assets are less than current liabilities. It indicates that
cash not met the obligations.
Long term was increased in five years, which implies fewer dues to others.
Cash in hand & back is more, which indicates immediate liquid of funds.

2.3 TREND ANALYSIS:

This method is used to analyze the trend in the growth of the companys
32

current assets and purchase, sales and n e t p r o f i t . For this the Trend analysis
method is used to make a clear idea. The trend analysis is done based on the
following method. The trend equation is to be analyzed for this purpose.

Trend analysis percentage = (current year /base year) * 100

Base year is consider to 100%
TREND ANALYSIS IN 2008-2012
TABLE NO.11
TREND ANALYSIS IN 2008-2012
(BASE YEAR IS 2008)
Current Assets

Net Profit

(%)

(%)

100

100

100

122.73

113.01

99.89

154.56

2010

91.72

97.11

46.35

23.01

2011

24.33

26.69

43.91

196.39

2012

87.21

81.90

38.50

16.86

Year

Purchase (%)

Sales (%)

2008

100

2009

Trend analysis is based on the idea that what has happened in the past gives
traders an idea of what will happen in the future.
Trend analysis evaluates an organizations financial information over a period

of time. The goal is to calculate and analyze the amount change and percent
change from one period to the next.

33

 Trend percentage of financial statement as based on the year 2008. Sales have
been decreasing during the period 2010-12.
And purchase also has been decreasing trend in 2010-12.Current assets and net
profit has been decreasing trend in the last three years.
Finally all items of financial trend statement in pasted 3 years very low.
It is indicate that the company was bad performing. So immediate to improve
their performance in next year
FIGURE.1

34