Question 22 Chapter 2 VK Publications Class 12 Part 2 – 2021
22. Prepare a Common Size Balance Sheet and comment on the financial position of X Ltd.and Y Ltd. The Balance Sheets of X Ltd. and Y Ltd. as on 31st March,2018 are given below:
Particulars | 2018 (Rs.) | 2017 (Rs.) | |
I.EQUITY AND LIABILITIES | |||
1. Shareholders’ Funds | |||
(a) Share Capital | 9,00,000 | 12,00,000 | |
(b) Reserves and Surplus | 4,00,000 | 3,50,000 | |
2. Current Liabilities | |||
(a) Short-term Borrowings | 2,00,000 | 2,50,000 | |
Total | 15,00,000 | 18,00,000 | |
II. ASSETS | |||
1. Non-Current Asset | |||
(a) Fixed Assets | 10,00,000 | 16,00,000 | |
2. Current Assets | |||
(a) Cash and Cash Equivalents | 5,00,000 | 2,00,000 | |
Total | 15,00,000 | 18,00,000 |
The solution of Question 22 Chapter 2 VK Publications Class 12 Part 2: –
Common Size Balance Sheet Statement For the years ended 31st March, 2017 and 2018
Particulars | Note | Absolute Amounts | Percentage of the Balance sheet Total | ||
X Ltd. | Y Ltd. | X Ltd. | Y Ltd. | ||
Rs. | Rs. | % | % | ||
I. Equity & Liabilities | |||||
1. Shareholder’s Fund | |||||
a. Share Capital | 9,00,000 | 12,00,000 | 60.00 | 66.67 | |
b. Reserve & Surplus | 4,00,000 | 3,50,000 | 26.67 | 19.44 | |
2. Current Liabilities | |||||
a. Long term Borrowings | 2,00,000 | 2,50,000 | 13.33 | 13.89 | |
Total | 15,00,000 | 18,00,000 | 100.00 | 100.00 | |
II. Assets | |||||
1. Non – current Assets | |||||
a. Fixed Assets | 10,00,000 | 16,00,000 | 66.67 | 88.89 | |
2. Current Assets | |||||
a. Cash & Cash equivalent | 5,00,000 | 2,00,000 | 33.33 | 11.11 | |
Total | 15,00,000 | 18,00,000 | 100.00 | 100.00 |
Comment:
(i) The short-term financial position of X Ltd. is better as compared to Y Ltd. as currentliabilities of X Ltd. are 13.33% of total funds invested and current assets are 33.33% ofthese funds. On the other hand, current liabilities of Y Ltd. are 13.89% of total funds and current assets are 11.11% of these funds.
(ii) Y Ltd. has invested more (88.89%) in fixed assets as composed to X Ltd. (66.67%).
(iii) The long-term financial position of both companies is almost equal and sound. Net worth is 86.67% (60 + 26.67) of total funds in case of X Ltd. and 86.11% (66.67 + 19.44) of total : funds in case of Y Ltd.
Financial Statement Analysis and its tools or Techniques
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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