Question

The accompanying balance sheet and profit and loss account related to SUMO Logistics Pvt. Ltd. Convert these into Common Size Statements.

Previous Year = 2005, Current Year = 2006

Rs’000
	Previous Year	Current Year
Liabilities
Equity Share Capital (of Rs 10 each)	240	240
General Reserve	96	182
Long Term loans	182	169.5
Creditors	67	52
Outstanding expenses	6	-
Other Current liabilities	9	6.5
Total Liabilities	600	650
Assets
Plant assets net of accumulated less depreciation	402	390
Cash	54	78
Debtors	60	65
Inventories	84	117
Total Assets	600	650

Income Statement for the year ended
Rs’000
	Previous Year	Current Year
Gross Sales	370	480
Less : Returns	20	30
Net Sales	350	450
Less : Cost of goods sold	190	215
Gross Profit	160	235
Less : Selling general and administration expenses	50	72
Operating profit	110	163
Less : Interest expenses	20	17
Earnings before tax	90	146
Less : Taxes	45	73
Earnings After Tax	45	73

Answer 1

Common Size Balance Sheet of SUMO Logistics Pvt. Ltd. As on 2005 and 2006
Particulars		2005		2006
		Rs’000	%	Rs’000	%
Liabilities:
	Equity Share Capital (of Rs 10 each)	240	40	240	36.92
	General Reserve	96	16	182	28
	Long-term Loan	182	30.33	169.5	26.08
	Creditors	67	11.17	52	8
	Outstanding Expenses	6	1	–
	Other Current Liabilities	9	1.5	6.5	1
Total Liabilities		600	100	650	100
Assets:
	Plant less Accumulated Depreciation	402	67	390	60
	Cash	54	9	78	12
	Debtors	60	10	65	10
	Inventories	84	14	117	18
Total Assets		600	100	650	100

Common Size Income Statement of SUMO Logistics Pvt. Ltd. For the year ended 2005 and 2006
Particulars		2005		2006
		Rs’000	%	Rs’000	%
Gross Sales		370	105.71	480	106.67
	Less: Returns	20	5.71	30	6.67
Net Sales		350	100.00	450	100.00
	Less: Cost of Goods Sold	190	54.29	215	47.77
Gross Profit		160	45.71	235	52.23
	Less: Selling General and Administration Expenses	50	14.28	72	16.00
Operating Profit		110	31.43	163	36.23
	Less: Interest Expenses	20	5.72	17	3.77
Earnings Before Tax		90	25.71	146	32.46
	Less: Taxes	45	12.86	73	16.23
Earnings After Tax		45	12.86	73	16.23