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The Motto of 'Pharma Ltd', a Company Engaged in the Manufacturing of Low-cost Generic Medicines, is 'Healthy India' Following is the Comparative Statement of Profit and Loss of the Company for the Years Ended 31-3-2013 and 31-3-2014. - Accountancy

The motto of 'Pharma Ltd', a company engaged in the manufacturing of low-cost generic medicines, is 'Healthy India'. Its management and employees are hardworking, honest and motivated. The net profit of the company doubled during the year ended 31-3-2014. Encouraged by its performance, the company decided to pay the bonus to all employees at double the rate than last year. Following is the Comparative Statement of Profit and Loss of the company for the years ended 31-3-2013 and 31-3-2014.

Pharma Ltd
Comparative Statement of Profit and Loss
Particulars Note
No.

2012-13

Rs

2013-14

Rs

Absolute
Change

Rs

%
Change

Revenue from operations

Less Employee benefit expenses

Profit before tax

Tax Rate 25%

Profit after tax

 

20,00,000

12,00,000

8,00,000

2,00,000

6,00,000

30,00,000

14,00,000

16,00,000

4,00,000

12,00,000

10,00,000

2,00,000

8,00,000

2,00,000

6,00,000

50

16-87

100

100

100

1) Calculate Net Profit Ratio for the years ending 31st March, 2013 and 2014

2) Identify any two values which ‘Pharma Ltd’ is trying to propagate

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Solution

For 2013

Net Profit Ratio = `"Net Profit after Tax"/"Revenue from Operations" xx 100

= `600000/2000000 xx 100`

= 30%

For 2014

Net Profit Ratio = `"Net Profit after Tax"/"Revenue from Operations" xx 100`

`= 1200000/3000000 xx 100`

= 40%

The following are the values that are propagated by pharma Ltd.

1) Staff welfare (since it depicts concerns for its staff members)

2) Boosting the morale of employees

Concept: Comparative Statements
  Is there an error in this question or solution?
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