Question

Prepare a Common Size Statement of Profit and Loss of Laveena Ltd. for the year ended 31st March, 2023 and 31st March, 2024 from the following information:

Particulars	2023--24 (₹)	2022--23 (₹)
Revenue from operations	₹80,00,000	₹40,00,000
Purchase of stock in trade	₹8,00,000	₹4,00,000
Other expenses	₹80,000	₹40,000

Tax Rate: $50%$

Hint:

In a common size income statement, every item is shown as a percentage of revenue from operations. This helps in comparing financials over years or with peers, regardless of scale.

Answer 1

Step 1: Calculate Net Profit Before and After Tax

For 2023–24:
Revenue from operations = ₹80,00,000
Less: Purchase of stock-in-trade = ₹8,00,000
Less: Other Expenses = ₹80,000
$\Rightarrow$ Net Profit before tax = ₹71,20,000
$\Rightarrow$ Net Profit after tax @50% = ₹35,60,000

For 2022–23:
Revenue from operations = ₹40,00,000
Less: Purchase of stock-in-trade = ₹4,00,000
Less: Other Expenses = ₹40,000
$\Rightarrow$ Net Profit before tax = ₹35,60,000
$\Rightarrow$ Net Profit after tax @50% = ₹17,80,000

Common Size Statement of Profit and Loss
(for the years ended 31st March, 2024 and 2023)

 

Particulars	2023–24 (%)	2022–23 (%)
Revenue from operations	100.00%	100.00%
Purchase of stock-in-trade	10.00%	10.00%
Other expenses	1.00%	1.00%
Net Profit before tax	88.00%	89.00%
Tax (50%)	44.00%	44.50%
Net Profit after tax	44.00%	44.50%