Question:
From the following information, prepare a Common Size Statement of Profit and Loss of AG Ltd. for the year ended 31st March, 2025:
Particulars 2024-25 (Rs) 2023-24 (Rs) Revenue from Operations 25,00,000 20,00,000 Other Income 1,00,000 1,00,000 Cost of Materials Consumed 17,00,000 14,00,000 Other Expenses 3,00,000 3,00,000 Tax Rate 50%
From the following information, prepare a Common Size Statement of Profit and Loss of AG Ltd. for the year ended 31st March, 2025:
| Particulars | 2024-25 (Rs) | 2023-24 (Rs) |
| Revenue from Operations | 25,00,000 | 20,00,000 |
| Other Income | 1,00,000 | 1,00,000 |
| Cost of Materials Consumed | 17,00,000 | 14,00,000 |
| Other Expenses | 3,00,000 | 3,00,000 |
| Tax Rate | 50% |
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Take Revenue from Operations (Rs. 25,00,000) as 100 per cent and divide every other item by it. Tax is 50% of profit before tax. Profit before tax comes to 24% and profit after tax to 12%.
Updated On: Oct 26, 2026
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Solution and Explanation
Step 1: What a Common Size Statement shows:
A Common Size Statement of Profit and Loss expresses every item as a percentage of one base figure.
The base is Net Revenue from Operations, so it is taken as 100 per cent.
Here the base is Rs. 25,00,000 for the year 2024-25. Each item is divided by Rs. 25,00,000 and multiplied by 100.
Step 2: Working Notes for the totals:
Total Revenue = Revenue from Operations + Other Income = Rs. 25,00,000 + Rs. 1,00,000 = Rs. 26,00,000.
Total Expenses = Cost of Materials Consumed + Other Expenses = Rs. 17,00,000 + Rs. 3,00,000 = Rs. 20,00,000.
Profit before Tax = Total Revenue - Total Expenses = Rs. 26,00,000 - Rs. 20,00,000 = Rs. 6,00,000.
Tax at 50% of Rs. 6,00,000 = Rs. 3,00,000.
Profit after Tax = Rs. 6,00,000 - Rs. 3,00,000 = Rs. 3,00,000.
Step 3: Working Notes for the percentages:
Other Income = 1,00,000 / 25,00,000 x 100 = 4%.
Total Revenue = 26,00,000 / 25,00,000 x 100 = 104%.
Cost of Materials Consumed = 17,00,000 / 25,00,000 x 100 = 68%.
Other Expenses = 3,00,000 / 25,00,000 x 100 = 12%.
Total Expenses = 20,00,000 / 25,00,000 x 100 = 80%.
Profit before Tax = 6,00,000 / 25,00,000 x 100 = 24%. Tax = 3,00,000 / 25,00,000 x 100 = 12%. Profit after Tax = 12%.
The 2023-24 figures are given in the question but are not needed, because the statement asks only for the year ended 31st March, 2025.
Step 4: Common Size Statement of Profit and Loss of AG Ltd.:
For the year ended 31st March, 2025
Final Answer:
Profit before Tax is 24% and Profit after Tax is 12% of Net Revenue from Operations. Total Revenue is 104% and Total Expenses are 80%.
A Common Size Statement of Profit and Loss expresses every item as a percentage of one base figure.
The base is Net Revenue from Operations, so it is taken as 100 per cent.
Here the base is Rs. 25,00,000 for the year 2024-25. Each item is divided by Rs. 25,00,000 and multiplied by 100.
Step 2: Working Notes for the totals:
Total Revenue = Revenue from Operations + Other Income = Rs. 25,00,000 + Rs. 1,00,000 = Rs. 26,00,000.
Total Expenses = Cost of Materials Consumed + Other Expenses = Rs. 17,00,000 + Rs. 3,00,000 = Rs. 20,00,000.
Profit before Tax = Total Revenue - Total Expenses = Rs. 26,00,000 - Rs. 20,00,000 = Rs. 6,00,000.
Tax at 50% of Rs. 6,00,000 = Rs. 3,00,000.
Profit after Tax = Rs. 6,00,000 - Rs. 3,00,000 = Rs. 3,00,000.
Step 3: Working Notes for the percentages:
Other Income = 1,00,000 / 25,00,000 x 100 = 4%.
Total Revenue = 26,00,000 / 25,00,000 x 100 = 104%.
Cost of Materials Consumed = 17,00,000 / 25,00,000 x 100 = 68%.
Other Expenses = 3,00,000 / 25,00,000 x 100 = 12%.
Total Expenses = 20,00,000 / 25,00,000 x 100 = 80%.
Profit before Tax = 6,00,000 / 25,00,000 x 100 = 24%. Tax = 3,00,000 / 25,00,000 x 100 = 12%. Profit after Tax = 12%.
The 2023-24 figures are given in the question but are not needed, because the statement asks only for the year ended 31st March, 2025.
Step 4: Common Size Statement of Profit and Loss of AG Ltd.:
For the year ended 31st March, 2025
| Particulars | Absolute Amount 2024-25 (Rs) | Percentage of Net Revenue from Operations 2024-25 (%) |
|---|---|---|
| Revenue from Operations | 25,00,000 | 100 |
| Other Income | 1,00,000 | 4 |
| Total Revenue | 26,00,000 | 104 |
| Less: Expenses | ||
| Cost of Materials Consumed | 17,00,000 | 68 |
| Other Expenses | 3,00,000 | 12 |
| Total Expenses | 20,00,000 | 80 |
| Profit before Tax | 6,00,000 | 24 |
| Less: Tax at 50% | 3,00,000 | 12 |
| Profit after Tax | 3,00,000 | 12 |
Final Answer:
Profit before Tax is 24% and Profit after Tax is 12% of Net Revenue from Operations. Total Revenue is 104% and Total Expenses are 80%.
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