Question

From the following information, prepare a Common Size Statement of Profit and Loss of QLM Ltd. for the year ended 31st March, 2023 and 31st March, 2024.

Hint:

In a common size statement, every item is calculated as a percentage of net revenue from operations. It helps in comparing performance across years or firms of different sizes.

Answer 1

In a Common Size Statement, each item is expressed as a percentage of Revenue from operations.

Given:

• Revenue from operations: ₹40,00,000 (2022–23), ₹50,00,000 (2023–24)
• Cost of revenue from operations: ₹20,00,000 (2022–23), ₹25,00,000 (2023–24)
• Other expenses: ₹4,00,000 (2022–23), ₹5,00,000 (2023–24)
• Tax Rate: 50%

Step-wise Calculations:

• Gross Profit = Revenue – Cost of Revenue
  2022–23: ₹40,00,000 – ₹20,00,000 = ₹20,00,000
  2023–24: ₹50,00,000 – ₹25,00,000 = ₹25,00,000
• Net Profit before tax = Gross Profit – Other Expenses
  2022–23: ₹20,00,000 – ₹4,00,000 = ₹16,00,000
  2023–24: ₹25,00,000 – ₹5,00,000 = ₹20,00,000
• Tax @ 50%
  2022–23: 50% of ₹16,00,000 = ₹8,00,000
  2023–24: 50% of ₹20,00,000 = ₹10,00,000
• Net Profit after Tax
  2022–23: ₹16,00,000 – ₹8,00,000 = ₹8,00,000
  2023–24: ₹20,00,000 – ₹10,00,000 = ₹10,00,000

Common Size Statement of Profit and Loss of QLM Ltd.
for the years ended 31st March, 2023 and 2024 (as % of Revenue from Operations)

 

Particulars	2022–23 (%)	2023–24 (%)
Revenue from operations (Base)	\( 100.00 \)	\( 100.00 \)
Cost of revenue from operations	\( 50.00 \)	\( 50.00 \)
Gross Profit	\( 50.00 \)	\( 50.00 \)
Other expenses	\( 10.00 \)	\( 10.00 \)
Net Profit before Tax	\( 40.00 \)	\( 40.00 \)
Tax (50%)	\( 20.00 \)	\( 20.00 \)
Net Profit after Tax	\( 20.00 \)	\( 20.00 \)