A common size balance sheet shows the percentage of each asset to the __, and that of each liability to the .

Total current assets, Total current liabilities

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Liabilities, Assets

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Total assets, Total liabilities

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None of the above

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Solution

The correct option is C Total assets, Total liabilities
Common size statement is stated as a percentage of the aggregate, of which that item is a part i.e. common size balance sheet shows the percentage of each asset to the total assets, and that of each liability to the total liabilities. The common size statement is also known as component percentage statement, is a financial tool for studying the key changes and trends in financial position and operational result of a company.

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Q. Prepare a common size Balance Sheet of KJ Ltd. from the following information:

	Particulars	Note No.	31.3.2017 Rs.	31.3.2016 Rs.
I-	Equity and Liabilities:-
1.	Shareholder's Funds		$8, 00, 000$	$4, 00, 000$
2.	Non-current Liabilites		$5, 00, 000$	$2, 00, 000$
3.	Current Liabilities		$3, 00, 000$	$2, 00, 000$
		Total	$¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 16, 00, 000 - --------- -$	$¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 8, 00, 000 - -------- -$
II-	Assets
1.	Non-current Assets		$10, 00, 000$	$5, 00, 000$
2.	Current Assets		$6, 00, 000$	$3, 00, 000$
		Total	$¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 16, 00, 000 - --------- -$	$¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 8, 00, 000 - -------- -$

Prepare a Common Size balance sheet from the following balance sheet of Aditya Ltd. and Anjali Ltd.:

Particulars	Aditya Ltd. Rs.	Anjali Ltd. Rs.
I. Equity and Liabilities
a) Equity share capital	6,00,000	8,00,000
b) Reserves and surplus	3,00,000	2,50,000
c) Current liabilities	1,00,000	1,50,000
Total	10,00,000	12,00,000
II. Assets
a) Fixed assets	4,00,000	7,00,000
b) Current assets	6,00,000	5,00,000
Total	1,00,0000*	12,00,000

*The total of Liabilities side must be equal to the total of Assets side, therefore, it should be 10,00,000.

In common size Balance Sheet , total of assets and liabilities is assumed to be equal to ________.

Prepare a Common size Balance Sheet of the Xerox Ltd. Their Balance Sheet as at 31-03-2017 and 31-03-2018 was as follows:

$\begin{matrix} Particulars & 31-03-2017 & 31-03-2018 (Rs) & (Rs) I . EQUITY AND LIABILITIES (1) Shareholders' Funds: (a) Share Capital & 9, 00, 000 & 12, 00, 000 (b) Reserve and Surplus & 4, 00, 000 & 3, 50, 000 (2) Current Liabilities : (a) Trade Payables & 2, 00, 000 & 2, 50, 000 Total & 15, 00, 000 & 18, 00, 000 I I . ASSETS (1) Non-current Assets : (a) Fixed Assets & 10, 00, 000 & 16, 00, 000 (2) Current Assets & 5, 00, 000 & 2, 00, 000 Total & 15, 00, 000 & 18, 00, 000 \end{matrix}$

Following is the Balance Sheet of Raj Oil Mills Limited as at March 31, 2017. Calculate Current Ratio.

Particulars	(Rs)
I. Equity and Liabilities:
1. Shareholders’ funds
a) Share capital	7,90,000
b) Reserves and surplus	35,000
2. Current Liabilities
a) Trade Payables	72,000
Total	8,97,000
II. Assets
1. Non-current Assets
a) Fixed assets
Tangible assets	7,53,000
2. Current Assets
a) Inventories	55,800
b) Trade Receivables	28,800
c) Cash and cash equivalents	59,400
Total	8,97,000

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A common size balance sheet shows the percentage of each asset to the ________, and that of each liability to the ______.

A common size balance sheet shows the percentage of each asset to the __, and that of each liability to the .