The comparative balance sheet shows that between 2019 and 2020: - Total shareholders' funds increased by Rs. 2,96,000 (+40%) due to increases in share capital and reserves. - Non-current liabilities decreased by Rs. 1,00,000 (-33.33%) because of a reduction in long-term borrowings. - Total assets increased by Rs. 2,80,000 (+20.68%) with rises in both non-current and current assets, indicating an overall improvement in the company's financial position.

1. MANAGEMENTACCOUNTING
FinancialAnalysis and Interpretation :
Comparative Financial StatementAnalysis
Comparative Balance Sheet
By:
Smt.UMA MINAJIGI REUR
HEAD, DEPT. OF COMMERCE & Management
Smt. V G Degree College for Women, Kalaburagi

2. MANAGEMENT
ACCOUNTING
B.COM SIXTH SEMESTER
&
BBA FOURTH SEMESTER
6.3: PRINCIPLES OF MANAGEMENT ACCOUNTING

3. MANAGEMENTACCOUNTING
FinancialAnalysis and Interpretation :
Comparative Financial StatementAnalysis
Comparative Balance Sheet

4. Comparative Balance Sheet
It helps to study the difference between the assets and liabilities of
two years, reasons for the difference and their short and long term
financial implications.
Comparative balance sheets of two or more different dates can be
used for comparing assets and liabilities and finding out any
increase or decrease in those assets.

5. A comparative balance sheet has four columns:
First Column, Last year’s absolute figures.
Second Column, Current year’s absolute figures.
Third Column, increase or decrease in figures as recorded
plus(+) for increase and minus(-) for decrease.
Fourth Column, percentage of increase or decrease.

6. Guidelines or steps for interpretations of comparative balance sheet.
The following are the steps or guidelines for analysis and interpretation of comparative balance sheet:
Analyse and interpret the current financial position and liquidity position.
Financial Position:
Excess of current assets over current liabilities is known as working capital. Increase in working capital indicates
improvement in current financial position of the concern.
Liquidity position:
Liquid assets like cash in hand, cash at bank, debtor and bills receivable etc.
If increase of liquid assets in current year as compared to last year indicates that there is an increase in liquidity
position.
Analysis of long term financial position.
It is a detailed analysis of fixed assets, long term liabilities and capital.
Analysis of profitability.
Increase in profitability of other sources indicates profitability of the concern. Decrease in profit indicates
deterioration in profitability.
Concluding remarks
Finally, an opinion should be given about the financial position of the concern i.e, good or bad.

7. Format:
Comparative Statement of Assets & Liabilities
Particulars 31-12-2019 31-12-2020 Increase or Decrease in
amount
Increase or
Decrease in
percentage
Amount Amount
I. Equity & Liabilities
1. Shareholders fund
Share Capital 6,00,000 8,00,000 +2,00,000 +33.33%
Reserves & Surplus 1,40,000 2,36,000 +96,000 +68.57%
Total Shareholders funds (A) 7,40,000 10,36,000 +2,96,000 +40.00%
2. Non-Current Liabilities
Long Term Borrowings 3,00,000 2,00,000 -1,00,000 -33.33%
Total Non-Current Liabilities (B) 3,00,000 2,00,000 -1,00,000 -33.33%
3. Current Liabilities
Trade Payables 1,50,000 1,98,000 +48,000 +32.00%
Short Term provisions 1,64,000 2,00,000 +36,000 +21.95%
Total Current Liabilities (C) 3,14,000 3,98,000 +84,000 +26.75%
Total (A+B+C) 13,54,000 16,34,000 +2,80,000 +20.68%
II. Assets
1. Non-Current Assets
a. Fixed Assets
Tangible Assets 5,60,000 7,40,000 +1,80,000 +32.14%
Intangible Assets 2,30,000 1,80,000 -50,000 -21.74%
Total Non-Current Assets (D) 7,90,000 9,20,000 +1,30,000 +16.46%
2. Current Assets
Inventories 1,54,000 2,18,000 +64,000 +41.56%
Trade receivables 3,60,000 4,60,000 +1,00,000 +27.78%
Cash & Cash Equivalents 50,000 36,000 -14,000 -28.00%
Total Current Assets (E) 5,64,000 7,14,000 +1,50,000 +26.60%
Total Assets (D+E) 13,54,000 16,34,000 +2,80,000 +20.68%

8. Illustration 1:
The following are the statement of Assets and Liabilities of a concern as on 31-12-2019 and 2020.
Particulars 31-12-2019 31-12-2020
Amount Amount Amount Amount
I. Equity & Liabilities
1. Shareholders fund
Share Capital 6,00,000 8,00,000
Reserves & Surplus 1,40,000 7,40,000 2,36,000 10,36,000
2. Non-Current Liabilities
Long Term Borrowings 3,00,000 2,00,000
3. Current Liabilities
Trade Payables 1,50,000 1,98,000
Short Term provisions 1,64,000 3,14,000 2,00,000 3,98,000
Total 13,54,000 16,34,000
II. Assets
1. Non-Current Assets
a. Fixed Assets
Tangible Assets 5,60,000 7,40,000
Intangible Assets 2,30,000 7,90,000 1,80,000 9,20,000
2. Current Assets
Inventories 1,54,000 2,18,000
Trade receivables 3,60,000 4,60,000
Cash & Cash Equivalents 50,000 5,64,000 36,000 7,14,000

9. Notes to Accounts
Particulars 31-12-2019 31-12-2020
Amount Amount
Note 1: Share Capital 6,00,000 8,00,000
Share Capital 6,00,000 8,00,000
Note 2: Reserves & Surplus
General Reserves 80,000 1,40,000
Profit & Loss 60,000 96,000
Reserves & Surplus 1,40,000 2,36,000
Note 3: Long Term Borrowings
6% Debentures 3,00,000 2,00,000
Long Term Borrowings 3,00,000 2,00,000
Note 4: Trade Payable
Sundry Creditors 1,10,000 1,66,000
Bills Payable 40,000 32,000
Trade Payable 1,50,000 1,98,000
Note 5: Short Term Provisions
Provision for Taxation 80,000 1,00,000
Proposed Dividend 84,000 1,00,000
Short Term Provisions 1,64,000 2,00,000

10. Particulars 31-12-2019 31-12-2020
Amount Amount
Note 6: Tangible Assets
Machinery 1,60,000 4,00,000
Building 4,00,000 3,40,000
Tangible Assets 5,60,000 7,40,000
Note 7: Intangible Assets
Goodwill 2,30,000 1,80,000
Intangible Assets 2,30,000 1,80,000
Note 8: Inventories
Stock 1,54,000 2,18,000
Inventories 1,54,000 2,18,000
Note 9: Trade Receivables
Sundry Debtors 3,20,000 4,00,000
Bills Receivables 40,000 60,000
Trade Receivables 3,60,000 4,60,000
Note 10: Cash & Cash Equivalents
Cash 50,000 36,000
Cash & Cash Equivalents 50,000 36,000
Prepare a Comparative Balance Sheet of the concern and comment on the financial position of the company.

11. Illustration 1: Solution:
Comparative Statement of Assets & Liabilities
Particulars 31-12-2019 31-12-2020 Increase or
Decrease in
amount
Increase or
Decrease in
percentage
Amount Amount

12. Illustration 1: Solution:
Comparative Statement of Assets & Liabilities
Particulars 31-12-2019 31-12-2020 Increase or
Decrease in
amount
Increase or
Decrease in
percentage
Amount Amount
I. Equity & Liabilities
1. Shareholders fund
Share Capital 6,00,000 8,00,000
Reserves & Surplus 1,40,000 2,36,000
Total Shareholders funds (A) 7,40,000 10,36,000
2. Non-Current Liabilities
Long Term Borrowings 3,00,000 2,00,000
Total Non-Current Liabilities (B) 3,00,000 2,00,000
3. Current Liabilities
Trade Payables 1,50,000 1,98,000
Short Term provisions 1,64,000 2,00,000
Total Current Liabilities (C) 3,14,000 3,98,000
Total (A+B+C) 13,54,000 16,34,000
II. Assets
1. Non-Current Assets
a. Fixed Assets
Tangible Assets 5,60,000 7,40,000
Intangible Assets 2,30,000 1,80,000
Total Non-Current Assets (D) 7,90,000 9,20,000
2. Current Assets
Inventories 1,54,000 2,18,000
Trade receivables 3,60,000 4,60,000
Cash & Cash Equivalents 50,000 36,000
Total Current Assets (E) 5,64,000 7,14,000
Total Assets (D+E) 13,54,000 16,34,000
Particulars 31-12-2019 31-12-2020
Amount Amount Amount Amount
I. Equity & Liabilities
1. Shareholders fund
Share Capital 6,00,000 8,00,000
Reserves & Surplus 1,40,000 7,40,000 2,36,000 10,36,00
0
2. Non-Current Liabilities
Long Term Borrowings 3,00,000 2,00,00
0
3. Current Liabilities
Trade Payables 1,50,000 1,98,000
Short Term provisions
1,64,000
3,14,000
2,00,000
3,98,00
0
Total 13,54,00
0
16,34,0
00
II. Assets
1. Non-Current Assets
a. Fixed Assets
Tangible Assets 5,60,000 7,40,000
Intangible Assets 2,30,000 7,90,000 1,80,000 9,20,00
0
2. Current Assets
Inventories 1,54,000 2,18,000
Trade receivables 3,60,000 4,60,000
Cash & Cash
Equivalents
50,000 5,64,000 36,000 7,14,000
Total 13,54,00
0
16,34,0
00

13. Illustration 1: Solution:
Comparative Statement of Assets & Liabilities
Particulars 31-12-2019 31-12-2020 Increase or
Decrease in
amount
Increase or
Decrease in
percentage
Amount Amount
I. Equity & Liabilities
1. Shareholders fund
Share Capital 6,00,000 8,00,000
Reserves & Surplus 1,40,000 2,36,000
Total Shareholders funds (A) 7,40,000 10,36,000
2. Non-Current Liabilities
Long Term Borrowings 3,00,000 2,00,000
Total Non-Current Liabilities (B) 3,00,000 2,00,000
3. Current Liabilities
Trade Payables 1,50,000 1,98,000
Short Term provisions 1,64,000 2,00,000
Total Current Liabilities (C) 3,14,000 3,98,000
Total (A+B+C) 13,54,000 16,34,000
II. Assets
1. Non-Current Assets
a. Fixed Assets
Tangible Assets 5,60,000 7,40,000
Intangible Assets 2,30,000 1,80,000
Total Non-Current Assets (D) 7,90,000 9,20,000
2. Current Assets
Inventories 1,54,000 2,18,000
Trade receivables 3,60,000 4,60,000
Cash & Cash Equivalents 50,000 36,000
Total Current Assets (E) 5,64,000 7,14,000
Total Assets (D+E) 13,54,000 16,34,000

14. Illustration 1: Solution:
Comparative Statement of Assets & Liabilities
Particulars 31-12-2019 31-12-2020 Increase or Decrease in
amount
Increase or
Decrease in
percentage
Amount Amount
I. Equity & Liabilities
1. Shareholders fund
Share Capital 6,00,000 8,00,000 +2,00,000
Reserves & Surplus 1,40,000 2,36,000 +96,000
Total Shareholders funds (A) 7,40,000 10,36,000 +2,96,000
2. Non-Current Liabilities
Long Term Borrowings 3,00,000 2,00,000 -1,00,000
Total Non-Current Liabilities (B) 3,00,000 2,00,000 -1,00,000
3. Current Liabilities
Trade Payables 1,50,000 1,98,000 +48,000
Short Term provisions 1,64,000 2,00,000 +36,000
Total Current Liabilities (C) 3,14,000 3,98,000 +84,000
Total (A+B+C) 13,54,000 16,34,000 +2,80,000
II. Assets
1. Non-Current Assets
a. Fixed Assets
Tangible Assets 5,60,000 7,40,000 +1,80,000
Intangible Assets 2,30,000 1,80,000 -50,000
Total Non-Current Assets (D) 7,90,000 9,20,000 +1,30,000
2. Current Assets
Inventories 1,54,000 2,18,000 +64,000
Trade receivables 3,60,000 4,60,000 +1,00,000
Cash & Cash Equivalents 50,000 36,000 -14,000
Total Current Assets (E) 5,64,000 7,14,000 +1,50,000
Total Assets (D+E) 13,54,000 16,34,000 +2,80,000
=8,00,000-6,00,000
=236000-140000
=1036000-740000
=200000 - 300000
=200000 - 300000
= 198000 - 150000
= 200000 - 164000
= 398000 – 314000
= 1634000 - 1354000
=740000 - 560000
= 180000 - 230000
=920000 - 790000
=218000 - 154000
=460000 - 360000
= 36000 - 50000
= 714000 – 564000
= 1634000 - 1354000

15. Illustration 1: Solution:
Comparative Statement of Assets & Liabilities
Particulars 31-12-2019 31-12-2020 Increase or Decrease in
amount
Increase or
Decrease in
percentage
Amount Amount
I. Equity & Liabilities
1. Shareholders fund
Share Capital 6,00,000 8,00,000 +2,00,000 +33.33%
Reserves & Surplus 1,40,000 2,36,000 +96,000 +68.57%
Total Shareholders funds (A) 7,40,000 10,36,000 +2,96,000 +40.00%
2. Non-Current Liabilities
Long Term Borrowings 3,00,000 2,00,000 -1,00,000 -33.33%
Total Non-Current Liabilities (B) 3,00,000 2,00,000 -1,00,000 -33.33%
3. Current Liabilities
Trade Payables 1,50,000 1,98,000 +48,000 +32.00%
Short Term provisions 1,64,000 2,00,000 +36,000 +21.95%
Total Current Liabilities (C) 3,14,000 3,98,000 +84,000 +26.75%
Total (A+B+C) 13,54,000 16,34,000 +2,80,000 +20.68%
II. Assets
1. Non-Current Assets
a. Fixed Assets
Tangible Assets 5,60,000 7,40,000 +1,80,000 +32.14%
Intangible Assets 2,30,000 1,80,000 -50,000 -21.74%
Total Non-Current Assets (D) 7,90,000 9,20,000 +1,30,000 +16.46%
2. Current Assets
Inventories 1,54,000 2,18,000 +64,000 +41.56%
Trade receivables 3,60,000 4,60,000 +1,00,000 +27.78%
Cash & Cash Equivalents 50,000 36,000 -14,000 -28.00%
Total Current Assets (E) 5,64,000 7,14,000 +1,50,000 +26.60%
Total Assets (D+E) 13,54,000 16,34,000 +2,80,000 +20.68%

16. Calculation of percentages:
Percentage =
Increase or decrease amount in current year
X 100
Last year amount
Share Capital =
Net increase in Share Capital in 2020
X 100
Last year Share Capital (2019)
=
200000
X 100 = 33.33%
600000

17. Illustration 1: Solution:
Comparative Statement of Assets & Liabilities
Particulars 31-12-2019 31-12-2020 Increase or
Decrease in
amount
Increase or
Decrease in
percentage
Amount Amount
I. Equity & Liabilities
1. Shareholders fund
Share Capital 6,00,000 8,00,000 +2,00,000 +33.33%
Reserves & Surplus 1,40,000 2,36,000 +96,000 +68.57%
Total Shareholders funds (A) 7,40,000 10,36,000 +2,96,000 +40.00%
2. Non-Current Liabilities
Long Term Borrowings 3,00,000 2,00,000 -1,00,000 -33.33%
Total Non-Current Liabilities (B) 3,00,000 2,00,000 -1,00,000 -33.33%
3. Current Liabilities
Trade Payables 1,50,000 1,98,000 +48,000 +32.00%
Short Term provisions 1,64,000 2,00,000 +36,000 +21.95%
Total Current Liabilities (C) 3,14,000 3,98,000 +84,000 +26.75%
Total (A+B+C) 13,54,000 16,34,000 +2,80,000 +20.68%

18. Particulars 31-12-2019 31-12-2020 Increase or
Decrease in
amount
Increase or
Decrease in
percentage
Amount Amount
II. Assets
1. Non-Current Assets
a. Fixed Assets
Tangible Assets 5,60,000 7,40,000 +1,80,000 +32.14%
Intangible Assets 2,30,000 1,80,000 -50,000 -21.74%
Total Non-Current Assets (D) 7,90,000 9,20,000 +1,30,000 +16.46%
2. Current Assets
Inventories 1,54,000 2,18,000 +64,000 +41.56%
Trade receivables 3,60,000 4,60,000 +1,00,000 +27.78%
Cash & Cash Equivalents 50,000 36,000 -14,000 -28.00%
Total Current Assets (E) 5,64,000 7,14,000 +1,50,000 +26.60%
Total Assets (D+E) 13,54,000 16,34,000 +2,80,000 +20.68%

19. Thank You
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Problems on Comparative
Balance Sheet