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Question
From the following Statement of Profit & Loss of Everest Ltd., for the years ended 31st March, 2025 and 2026, prepare a Common-size Statement:
| Particulars | Note No. | 2025–26 | 2024–25 |
|---|---|---|---|
| Revenue from Operations | ₹ 25,00,000 | ₹ 20,00,000 | |
| Employee Benefit Expenses | ₹ 10,00,000 | ₹ 7,00,000 | |
| Other Expenses | ₹ 2,00,000 | ₹ 3,00,000 | |
| Tax Rate | 40% | 40% |
Ledger
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Solution
| Common-size Statement of Profit & Loss of Everest Ltd. (For the years ended 31st March, 2025 and 31st March, 2026) |
||||
| Particulars | Absolute Amount 2024–25 (₹) |
Absolute Amount 2025–26 (₹) |
Percentage of Revenue from Operations 2024–25 (%) |
Percentage of Revenue from Operations 2025–26 (%) |
| I. Revenue from Operations | 20,00,000 | 25,00,000 | 100.00% | 100.00% |
| II. Total Revenue (I) | 20,00,000 | 25,00,000 | 100.00% | 100.00% |
| III. Less: Expenses | ||||
| (a) Employee Benefit Expenses | 7,00,000 | 10,00,000 | 35.00% | 40.00% |
| (b) Other Expenses | 3,00,000 | 2,00,000 | 15.00% | 8.00% |
| Total Expenses (III) | 10,00,000 | 12,00,000 | 50.00% | 48.00% |
| IV. Profit before Tax (II - III) | 10,00,000 | 13,00,000 | 50.00% | 52.00% |
| V. Less: Tax @ 40% | 4,00,000 | 5,20,000 | 20.00% | 20.80% |
| VI. Profit after Tax (IV - V) | 6,00,000 | 7,80,000 | 30.00% | 31.20% |
Working Notes:
In a Common-size Statement of Profit & Loss, Revenue from Operations is taken as the base value (100%). Individual items are computed as a percentage of Revenue from Operations.
$$\text{Percentage} = \frac{\text{Amount of Individual Item}}{\text{Revenue from Operations}} \times 100$$
Employee Benefit Expenses for 2024–25 = `(7,00,000)/(20,00,000) xx`
= 35.00%
Profit before Tax for 2025–26) = `(13,00,000)/(25,00,000) xx 100`
= 52.00%
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