C2-S2- COMPARATIVE & COMMON-SIZE STATEMENTS Common-size Balance Sheet Common-size Balance Sheet shows the percentage relation of each assetlliability to total assets/total liabilities including capital (i.e., equity and liabilities). In Common—size Balance Sheet, total assets or total of equity and liabilities are taken as 100 and all the amounts are expressed as percentage of the total. Comparative Common-size Balance Sheet for different periods helps to highlight the trends in different items. If it is prepared for different firms in an industry, it facilitates to assess the relative financial soundness and helps in understanding their financial strategy. Objectives of Common-size Balance Sheet 1. To analyse the changes in individual items of Balance Sheet. . To see the trend of different items of assets, equity and liabilities. 3. To assess the financial soundness and understand financial strategy. Preparation of Common-size Balance Sheet First Column: In this column, items of Balance Sheet are written, Second Column: In this column, Note number given against the line item is written. Third Column: In this column, amounts of different items (assets, equity and liabilities) of previous year are written. Fourth Column: In this column, amounts of different items (assets, equity and liabilities) of current year are written. Fifth Column: In this column, percentage relation of different items of previous year's Balance Sheet to Total of Equity and Liabiliies/Total Assets (taken as 100) are written. Sixth Column: In this column, percentage relation of different items of current year's Balance Sheet to Total of Equity and Liabiliies/Total Assets (taken as 100) are written. FORMAT OF COMMON-SIZE BALANCE SHEET CCOMMON-SIZE BALANCE SHEET oat. ote as Pace! Figuresasat | Figuesasat theendof | theendof Previous ear | Curent ear) ) 8 | 1 EQUITY AND WABILES | 1, Shareholder Funds | (0) Shae Cott (i) Eau Share Copal (i) Preference Share Capal (b) Reserves and Surplus 2. Non-Curant bles (@) Long-term Borrowings 1) Longtem rons 4 Curent Lbs (a) Short-term Borrowings () Tade Paps (c) Other Curent Lilies (4 Shot tem Provsins Toul 1, ASSETS 1, Won-Curent Assets (a) Fred Ase () Tangle Assets (i) mangle Assets (6). Non-curent Investments (Longer oan and Advances 2, Curent Assets (a) Curent Investments (0) Inventories (2) Trade ecehabls (4) Cashand Cash Equilents (@) Shot-tem Loans and Advances (*) ter Curent Assets Toul Note It doesnot include lin tems of Balance Sheet acourtng treatment of which ar not tobe evaluated, Q 26 (TS GREWAL) - COMMON-SIZE BALANCE SHEET 26. From the following information, prepare a Common-size Balance Sheet: 7 7 _BALANCE SHEET as ot 31st March, 2021 — Particulars | Note 31stMarch, 31st March, No 2021) 2020) 1. EQUITY AND LIABILITIES 1. Shareholders’ Funds (a) Shar Capital 3290000 1800000 (b) Reserves and Surplus ‘800000 6.00000 2. Non-Current Liabilities Long-term Borrowings 600.000 1200000 800.000 12,00,000 400,000 48,00,000 (2) Property Plant and Equipment (Fixed Assets: Tangible Assets (8) Non-current Investments 2. Current Assets (a) lnventories (b) Trade Receivables (@) Cashand Cash Equivalents PERCENTAGE OF ABSOLUTE AMOUNTS, BALANCE SHEET TOTAL () 1ST MARCH, 202] 3187 MARCH, 22) 1ST MARCH, 202] 318T MARCH, 202} eel ° CO ° o EQUITY & UABILTIES (2) Share Copal (0) Reserves and Sup 2. Non Curent Lisblties Lang Term Barras 2. Curent Lsbites TOTAL Wassers (@) Proper, Pant & Equpmon (Fed Assets) (0) Non Curent investments (0) Tendo Roconabies {€) Gash a Gash Equivalents