Casual Comparative Size Balance Sheet
This is done by stating income statement items as a percent of net sales and balance sheet items as a percent of total assets or total liabilities and shareholders equity.
Comparative size balance sheet. Prepare a Comparative Balance Sheet and study the financial position of the company. Assume Company ABC has long-term debt of 200 million and total assets of 800 million. Comparative balance sheet analyses the assets and liabilities of business for the current year and also compares the increase or decrease in them in relative as well as absolute parameters.
Balance sheet of Reliance Industries Limited 2009 Rupees in Cr 2010 Rupees in Cr amount of increase decrease Percentage of increase decrease Application Of Funds Gross Block 14962870 21586471 6623601 4427 Less. A common size balance sheet allows for the relative percentage of each asset liability and equity account to be quickly analyzed. Example of Common Size Balance Sheet Here is an example of how useful information is revealed by the common size balance sheets.
TS Grewal solutions for Class 12 Accountancy - Analysis of Financial Statements chapter 2 Tools of Financial Statement Analysis-Comparative Statements and Common-Size Statements include all questions with solution and detail explanation. Also called vertical analysis converts each line of financial statement data to an easily comparable or common-size amount measured as a percent. The formula for calculating a balance sheet into a common size balance sheet you must divide each line item by total assets.
In the comparative statement the base year values are compared with the current year and in the common size statement the value of the current year compared by calculating the share of the percentage of the particular item out of the total of the balance sheet or net sale if comparing profit and loss account. The use of percentages eliminates the difference in dollar amounts presented in the financial statements of different size companies. Thanks for reading the topic.
Any single asset line item is compared to the value of total. This will clear students doubts about any question and improve application skills while preparing for board exams. 91-8800215448In this lecture I have discussed and explained the format procedure and utilit.
For full course visit.