Common Size statement

LTC03

Prashant Pal JL22PG135

Rajshree Vardhan JL22PG148
Neeraj Kholiya JL22PG122
 Meaning
Common size statements are those in which individual figures
are converted into percentages to some common base.
This type of analysis is called Vertical Analysis since each
accounting variable is analysed vertically.

Types of Common Size Statements:

1) Common size statement of Profit & Loss

2) Common size statement of balance sheet

2
 USE OF COMMON SIZE STATEMENT

1. The common-size statement gives a simple way to evaluate

financial statements.

2. The common size percentages help to show how each line item
or component affects the financial position of the company.

3. Common size statements help to compare a company's

performance over several periods as well as against a
competitor's.
3
COMMON SIZE STATEMENT OF PROFIT & LOSS

A common size statement of Profit & Loss is

a statement in which the figures of revenue
from operations are assumed to be equal to
100 and all other figures are expressed as a
percentage of revenue from operations.

4
 Example

(Company X)
    Common size statement of profit & loss      
    For the year ended 31 March 2021& 2022    

Particulars Note No. Absolute amount ₹ Percentage of revenue from operation

31-03-2021 31-03-2022 31-103-2021 31-03-20122
1. Revenue from
operation   10000 20000 100 100    
2. Other income   2000 4000 25 20
3. Total revenue   12000 24000 125 120    
4. Expenses  
Cost of material
consumed   2000 5000 20 25    
Depreciation &
amortization expenses   1000 1000 10 10
5. Profit before tax   9000 18000 90 90    
    5
COMMON SIZE STATEMENT OF BALANCE SHEET

A common size statement of the balance

sheet is a statement in which the total of
assets or equity and liability is assumed to
be equal to 100 and all the figures are
expressed as a percentage of the total.

6
 Example
(Company X)
      Common Size Balance Sheet    
      As at 31 March 2021 & 2022    
Particulars Note No. Absolute amount ₹ Percentage of balance sheet total
31-03-2021 31-03-2022 31-103-2021 31-03-20122
1. Equity & Liabilities :            
(1) Shareholder's Fund  
a. Share capita   180 0000 1800000 45% 40%  

b. Reserves & surplus   400000 540000 10% 12%

(2) Non-Current liabilities   140 0000 1440000 35% 32%  

(3) Current liabilities   400000 720000 10% 16%
Total   400 0000 4500000 100% 100%  
2. Assets:  
(1) Non-Current Assets   2800000 3060000 70% 68%  
(2) Current Asset   1200000 1440000 30% 32%
Total   4000000 4500000 100% 100%   7
   
THANK YOU!

11