Prepare Common-size Balance Sheet and comment on the financial position of Sun Ltd. and Star Ltd. The Balance Sheet of Sun Ltd. and Star Ltd. as at 31st March, 2019 are:
Particulars
Sun Ltd.
(₹)
Star Ltd.
(₹)
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
Trade Payables (Creditors)
2,00,000
2,50,000
Total
15,00,000
18,00,000
II. ASSETS
1. Non-Current Assets
Fixed Assets (Tangible)
10,00,000
16,00,000
2. Current Assets
Trade Receivables (Debtors)
5,00,000
2,00,000
Total
15,00,000
18,00,000
Prepare Common-size Balance Sheet and comment on the financial position of Sun Ltd. and Star Ltd. The Balance Sheet of Sun Ltd. and Star Ltd. as at 31st March, 2019 are:
|
Particulars |
Sun Ltd. (₹) |
Star Ltd. (₹) |
| 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 |
|
|
|
Trade Payables (Creditors) |
2,00,000 |
2,50,000 |
|
Total |
15,00,000 |
18,00,000 |
| II. ASSETS | ||
|
1. Non-Current Assets |
||
|
Fixed Assets (Tangible) |
10,00,000 |
16,00,000 |
|
2. Current Assets |
|
|
|
Trade Receivables (Debtors) |
5,00,000 |
2,00,000 |
|
Total |
15,00,000 |
18,00,000 |
Common Size Balance Sheet
as at March 31, 2019
Particulars
Absolute Amount
(Rs)
Percentage of Balance Sheet Total
(%)
Sun Ltd.
Star Ltd.
Sun Ltd.
Star Ltd.
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital
9,00,000
12,00,000
60.00
66.67
b. Reserve and Surplus
4,00,000
3,50,000
26.67
19.44
2. Current Liabilities
a. Trade Payables
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. Trade Receivables
5,00,000
2,00,000
33.33
11.11
Total
15,00,000
18,00,000
100.00
100.00
Comments:
1. Star Ltd. has a greater share of Capital in the total sources of funds i.e. 66.67% in comparison to 60% of Sun Ltd.
2. Sun Ltd. retains 26.67% of their earnings as a part of Reserves and Surplus. Whereas, Star Ltd. retains only 19.44% of their earnings.
3. Star Ltd. has invested major portion of its funds on acquiring the Fixed Assets as these are 88.89% of the total application of funds in comparison to 66.67% of Sun Ltd. On the other hand, Sun Ltd. emphasises more on Current Assets as these are 33.33% of the total applications of funds in comparison to 11.11% of Star Ltd.
|
Common Size Balance Sheet as at March 31, 2019 |
||||
|
Particulars |
Absolute Amount (Rs) |
Percentage of Balance Sheet Total (%) |
||
|
Sun Ltd. |
Star Ltd. |
Sun Ltd. |
Star Ltd. |
|
|
I. Equity and Liabilities |
|
|
|
|
|
1. Shareholders’ Funds |
|
|
|
|
|
a. Share Capital |
9,00,000 |
12,00,000 |
60.00 |
66.67 |
|
b. Reserve and Surplus |
4,00,000 |
3,50,000 |
26.67 |
19.44 |
|
2. Current Liabilities |
|
|
|
|
|
a. Trade Payables |
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. Trade Receivables |
5,00,000 |
2,00,000 |
33.33 |
11.11 |
|
Total |
15,00,000 |
18,00,000 |
100.00 |
100.00 |
|
|
|
|
|
|
Comments:
1. Star Ltd. has a greater share of Capital in the total sources of funds i.e. 66.67% in comparison to 60% of Sun Ltd.
2. Sun Ltd. retains 26.67% of their earnings as a part of Reserves and Surplus. Whereas, Star Ltd. retains only 19.44% of their earnings.
3. Star Ltd. has invested major portion of its funds on acquiring the Fixed Assets as these are 88.89% of the total application of funds in comparison to 66.67% of Sun Ltd. On the other hand, Sun Ltd. emphasises more on Current Assets as these are 33.33% of the total applications of funds in comparison to 11.11% of Star Ltd.
