The document elaborates on comparative statements in financial analysis, focusing on comparative balance sheets and profit & loss statements. It discusses their purpose for comparing financial performance across multiple years, highlighting trends, increases or decreases in figures, and facilitating easier data interpretation. Illustrations and exercises are provided to guide the preparation of these statements, emphasizing the derivation of absolute changes and percentage variations in financial data.

1. School of Commerce
& Management

3. Comparative Statement

4.  Meaning
 Purpose
 Forms of presenting comparative statement
 Comparative Balance Sheet
 Advantage of comparative balance sheet
 Format of comparative balance sheet
 Illustration
 Exercise
 Comparative statements of profit & loss
 Objective of comparative statement of profit & loss
 Format of comparative statement of profit & loss
 Illustration
 Exercise

5.  When financial statements figures for two or
more years are placed side-by-side to facilitate
comparison, these are called “comparative
Financial Statements”.
 Such statements provide for columns to
indicate the increase or decrease in these
figures from one year to another in absolute
figures and in percentage form.

6.  To make the data simpler and more
understandable.
 To indicate the trend of firm.
 To indicate the strong points & weak points of
the firm.
 To compare the firm’s performance with
average performance of the industry.
 To help in forecasting.

7.  To show the absolute data in rupees amounts
only. For e.g. revenue from operations in 2015
₹4,00,000 and in 2016 ₹5,00,000.
 To show the increase and decrease in absolute
data in terms of money values. For e.g. in
comparison to 2015 revenue from operations in
2016 increased by 1,00,000.
 To show the increase and decrease in absolute
data in terms of percentages. For e.g. in
comparison to 2015 revenue from operation in
2016 increased by 25%.

8.  Comparison expressed by ratios. For e.g. if the
trade receivables in 2016 ₹1,00,000 and in 2017
₹2,00,00; then ratio will be
2,00,000
1,00,000
= 2:1.
 Use of cumulative figures and averages. For
e.g. land & building in 2013, 2014, 2015, 2016
and 2017 were ₹1,00,000; ₹1,50,000; ₹2,00,000;
₹1,10,000; ₹2,40,000 respectively. For e.g.
average land & buildings
8,00,000
5
= 1,60,000.

9. The comparative
balance sheet shows
increases and decreases
in the various assets,
liabilities and in capital.

10.  A single year’s balance sheet shows only the
balances of accounts on a particular date,
whereas the comparative balance sheet shows
not only the balances of accounts as on
different dates but also extent of increase or
decrease in various items of balance sheet.
 The balance sheet focuses on status, but the
comparative focus on changes.

11.  It consists of five column. Such as in
1st column = items of balance sheet
2nd column = data of previous year
3rd column = data of current year
4th column = increase or decrease in absolute
data in terms of rupees
5th column = percentage of increase or decrease in
absolute data.
 It is in the vertical form as per schedule III.

12. Particulars
Note
no.
Previous
Year
₹
Current
Year
₹
Absolute
Change
(In. /De.)
₹
% change
(In./de.)
%
A B C = B – A D
I. Equity & Liabilities :
(1) Shareholder’s Funds -
a. Share capital
b. Reserves & surplus
(2) Non current liabilities -
a. long term borrowings
b. long term provisions
(3) Current liabilities -
a. Short term borrowings
b. Trade payables
c. Other current liabilities
d. Short term provisions
Total

13. A
₹
B
₹
C = B - A
₹
D
%
II. Assets
(1) Non current assets -
a. Fixed assets
(i). Tangible assets
(ii). Intangible assets
b. Non-current Investments
c. Long-term loans & advances
(2) Current assets -
a. Current investments
b. Inventories
c. Trade receivables
d. Cash & Cash equivalents
e. Short-term loans & advances
f. Other Current assets
Total

14. 1. Y Ltd. Was in the business of manufacturing plastic bags. The company decided to
manufacture low cost jute bags instead of plastic bags. Following are the balance
sheets of Y Ltd. As at 31st march, 2015 & 2016. Prepare a comparative balance sheet.
Particulars Note
No.
31-3-16
₹
31-3-15
₹
I. Equity & Liabilities :
(1) Shareholder’s Funds-
a. Share Capital 10,00,000 8,00,000
b. Reserves & surplus 4,00,000 3,00,000
(2) Non-current liabilities-
a. long-term borrowings 2,00,000 3,00,000
(3) Current liabilities 4,00,000 5,00,000
Total 20,00,000 19,00,000
II. Assets :
(1) Non-current assets -
a. Fixed assets 15,00,000 12,00,000
(2) Current assets 5,00,000 7,00,000
Total 20,00,000 19,00,000

15. Particulars Not
e
no.
31-3-15
(₹)
31-3-16
(₹)
Absolute
changes
(₹)
% Change
(%)
A B C = B-A D=
CA×100
I. Equity & Liabilities :
(1) Shareholder’s Funds
a. Share Capital 8,00,000 10,00,000 2,00,000 25%
b. Reserves & surplus 3,00,000 4,00,000 1,00,000 33.33%
(2) Non-current liabilities -
a. Long-term borrowings 3,00,000 2,00,000 (1,00,000) (33.33%)
(3) Current liabilities 5,00,000 4,00,000 (1,00,000) (20%)
Total 19,00,000 20,00,000 1,00,000 5.2%
II. Assets
(1) Non-current assets -
a. Fixed assets 12,00,000 15,00,000 3,00,000 25%
(2) Current assets 7,00,000 5,00,000 (2,00,000) (28.7%)
Total 19,00,000 20,00,000 1,00,000 5.2%

16.  Bracket denotes negative sign.
 D = C  A × 100.
 So,
2,00,000
8,00,000
× 100 = 25%.

17. Particulars 31-3-17 31-3-16
₹ ₹
Reserves & Surplus 12,00,000 6,00,000
Share Capital 10,00,000 10,00,000
Trade payables 12,70,000 9,00,000
Land & buildings 16,00,000 15,00,000
Plant & machinery 6,30,000 5,00,000
Goodwill NIL 5,00,000
Investments 1,20,000 1,00,000
Current Assets 15,20,000 8,00,000
Long term borrowings 4,00,000 5,00,000
Note :- if in any question the proper balance sheet is not given so first prepare the
balance sheet then solve the question.

18. Particulars No
te
no.
31-3-17
₹
31-3-2016
₹
I. Equity & liabilities :
(1) Shareholder’s Funds -
a. Share Capital 10,00,000 10,00,000
b. Reserves & surplus 12,00,000 6,00,000
(2) Non current liabilities -
a. Long-term borrowings 4,00,000 5,00,000
(3) Current liabilities -
a. Trade payables 12,70,000 9,00,000
Total 38,70,000 30,00,000
II. Assets
(1) Non current assets
a. Fixed assets
i). Tangible assets 22,30,000 20,00,000

19. ii). Intangible assets NIL 1,00,000
b. Investments 1,20,000 1,00,000
(2) Current assets 15,20,000 8,00,000
Total 38,70,000 30,00,000
Notes :-
1. Tangible assets = 31-3-17 31-3-17
Land & Buildings 16,00,000 15,00,000
Plant & Machinery 6,30,000 5,00,000
22,30,000 20,00,000
2. Intangible assets =
Goodwill 1,00,000 NIL

20. Particulars Not
e no.
31-3-16
₹
31-3-17
₹
Absolute
change
₹
%
Change
%
A B C =B-A D=
CA×100
I. Equity & Liabilities :
(1) Shareholder’s Funds
a. Share capital 10,00,000 10,00,000 NIL NIL
b. Reserves & Surplus 6,00,000 12,00,000 6,00,000 100%
(2) Non current liabilities
a. Long term borrowings 5,00,000 4,00,000 (1,00,000) (20%)
(3) Current liabilities
a. Trade payables 9,00,000 12,70,000 3,70,000 41.11%
Total 30,00,000 38,70,000 8,70,000 29%
II. Assets :
(1) Non current assets
a. Fixed assets

21. i). Tangible assets 20,00,000 22,30,000 2,30,000 11.50%
ii). Intangible assets 1,00,000 NIL (1,00,000) (100%)
b. Investments 1,00,000 1,20,000 20,000 20%
(2) Current assets 8,00,000 15,20,000 7,20,000 90%
Total 30,00,000 38,70,000 8,70,000 29%
Note : Bracket denotes negative sign.

22. Particulars
Note
no.
31-3-2014
₹
31-3-13
₹
I. Equity & Liabilities :
(1) Shareholder’s Funds -
a. Share capital 8,00,000 4,00,000
b. Reserves & Surplus 1,00,000 1,00,000
(2) Non current liabilities -
a. Long term borrowings 5,00,000 4,00,000
(3) Current liabilities -
a. Short term borrowings 1,00,000 1,00,000
Total 15,00,000 10,00,000
II. Assets
(1) Non current assets 7,00,000 5,00,000
(2) Current assets
a. Inventories 4,00,000 3,00,000
1. From the following balance sheet of Royal Industries as at 31st march 2013 & 2014,
prepare a comparative balance sheet :-

23. b. Trade receivables 2,00,000 1,00,000
c. Cash & cash equivalents 2,00,000 1,00,000
Total 15,00,000 10,00,000

24. Particulars
31-3-15
₹(in lakh)
31-3-14
₹(in lakh)
Share capital 25 25
Reserves & surplus 10 8
Goodwill 3 2
Land & Buildings 20 15
Plant & machinery 10 15
Long term borrowings 3 2
Investments 2 1
Trade payables 1 1
Short term provisions 1 2
Current assets 5 5

25. A comparative statement
of profit & loss shows
the net profits or loss
for number of years so
that changes in absolute
in terms of money as
well as in terms of
percentage may be
known.

26.  Rate of increase or decrease in revenue from
operations (sales).
 Rate of increase or decrease in cost of materials
consumed.
 Rate of increase or decrease in incomes and
expenses.
 Rate of increase or decrease in net profit.

27.  To facilitate comparison of various items of
income & expenditure for two or more years.
 To analyse the increase or decrease in the
income & expenditure in terms of rupee and
also in percentage from one year to another.
 To analyse the increase or decrease in the
profits of the enterprise.
 To help in forecasting the profitability of the
business concern.

28.  It consists of five column :-
1st column = particulars
2nd column = previous year data
3rd column = current year data
4th column = increase or decrease in absolute data
5th column increase or decrease in various items in
the form of percentage.
 It is in the vertical form as per schedule III.

29. Particulars
Note
no.
Pervious
year
(₹)
Current
year
(₹)
Absolute
change
(₹)
%
change
(%)
A B C D
I. Revenue from operation
II. Add : Other income
III. Total revenue (I + II)
IV. Less : Expenses –
cost of materials consumed
purchase of stock-in-trade
change in inventories of F.G.,
WIP, stock-in-trade
employee benefit expenses
finance costs
depreciation and amortization
exp.
other expenses
Total expenses

30. V. Profit before tax (III – IV)
VI. Less : Tax
VII. Profit after tax (V - VI)

31. Particulars
31-3-15
₹
31-3-16
₹
I. Revenue from operation 10,00,000 12,00,000
II. Add : Other income 3,00,000 5,00,000
III. Total Revenue (I + II) 13,00,000 17,00,000
IV. Less : Expenses
Cost of material consumed 5,00,000 6,00,000
Depreciation & amortization expenses 10,000 20,000
V. Profit before tax (III - IV) 7,90,000 10,80,000
1. From the following information, prepare the comparative statement of profit & loss
:-
Note :- tax on profit is 50%.

32. Particulars
Note
no.
31-3-15
(₹)
31-3-16
(₹)
Absolute
change
(₹)
% change
(%)
A B C D
I. Revenue from operation 10,00,000 12,00,000 2,00,000 20%
II. Add : Other income 3,00,000 5,00,000 2,00,000 66.67%
III. Total revenue (I + II) 13,00,000 17,00,000 4,00,000 30.67%
IV. Less : Expenses
cost of material consumed 5,00,000 6,00,000 1,00,000 20%
depreciation & amortization
expenses
10,000 20,000 10,000 100%
V. Profit before tax (III - IV) 7,90,000 10,80,000 2,90,000 36.70%
VI. Tax (50%) 3,95,000 5,40,000 1,45,000 36.70%
VII. Profit after tax (V - VI) 3,95,000 5,40,000 1,45,000 36.70%

33. Particulars
Note
no.
31-12-16
₹
31-12-17
₹
I. Revenue from operations 20,00,000 22,00,000
II. Less : Expenses :
cost of materials consumed 7,00,000 6,00,000
finance cost 10,000 20,000
Total expenses 7,10,000 6,20,000
III. Profit before tax (I - II) 12,90,000 15,80,000
IV. Tax (45%) 5,80,500 7,11,000
VI. Profit before tax 7,09,500 8,69,000
1. Prepare a comparative statement of profit & loss from the following
information :-