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Question
Following is the Balance Sheet of Mahi Traders for the year ended 31-3-2018 and 31-3-2019:
| Liabilities | 31-03-2018 (₹) | 31-03-2019 (₹) | Assets | 31-03-2018 (₹) | 31-03-2019 (₹) |
| Equity Share Capital | 1,60,000 | 1,60,000 | Fixed Assets | 2,40,000 | 2,88,000 |
| Pref. Shares Capital | 40,000 | 40,000 | Investment | 40,000 | 40,000 |
| Reserve and Surplus | 40,000 | 48,000 | Current Assets | 1,20,000 | 96,000 |
| Secured Loan | 80,000 | 32,000 | |||
| Unsecured Loan | 40,000 | 72,000 | |||
| Current Liabilities | 40,000 | 72,000 | |||
| 4,00,000 | 4,24,000 | 4,00,000 | 4,24,000 |
Prepare Common Size Balance Sheet for the year 31-03-2018 and 31-03-2019
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Solution
Common Size Statement of Balance Sheet of Mahi Traders as on 31st March, 2018 and 31st March, 2019
| Particulars | Amount (₹) | % to total of Balance Sheet | ||
| 31-03-2018 (₹) | 31-03-2019 (₹) | 31-03-2018 (₹) | 31-03-2019 (₹) | |
| I. Sources of Funds: | ||||
| (1) Owner's Equity: | ||||
| Equity Share Capital | 1,60,000 | 1,60,000 | 44.45 | 45.45 |
| Preference Shares Capital | 40,000 | 40,000 | 11.11 | 11.36 |
| Reserve and Surplus | 40,000 | 48,000 | 11.11 | 13.64 |
| Net Worth | 2,40,000 | 2,48,000 | 66.67 | 70.45 |
| (2) Borrowed Funds: | ||||
| Secured Loans | 80,000 | 32,000 | 22.22 | 9.09 |
| Unsecured Loans | 40,000 | 72,000 | 11,11 | 20.46 |
| 1,20,000 | 1,04,000 | 33.33 | 29.55 | |
| Total Borrowed Funds | 3,60,000 | 3,52,000 | 100 | 100 |
| II. Application of Funds: | ||||
| (1) Fixed Assets | 2,40,000 | 2,88,000 | 66.67 | 81.82 |
| (2) Investments | 40,000 | 40,000 | 11.11 | 11.36 |
| 2,80,000 | 3,28,000 | 77.78 | 93.18 | |
| (3) Working Capital: | ||||
| (A) Current Assets | 1,20,000 | 96,000 | 33.33 | 27.27 |
| Less: (B) Current Liabilities | 40,000 | 72,000 | 11.11 | 20.45 |
| 80,000 | 24,000 | 22.22 | 6.82 | |
| Total Funds Applied | 3,60,000 | 3,52,000 | 100 | 100 |
Note: Taking Total borrowed funds and Total funds applied as base (100), calculation is done.
For example, % to total of Balance Sheet
`= "Value of equity share capital"/"Total borrowed funds" xx 100`
`= (1,60,000)/(3,60,000) xx 100`
≅ 44.45 %
Similarly other calculations can be done.
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