Take Revenue from operations (₹5,00,000) as 100% and express each item as a % of it. Profit before tax = ₹2,20,000 = 44%.

A common-size income statement (a tool of financial statement analysis in the TN HSC Class-12 Accountancy syllabus) restates every figure as a percentage of revenue from operations, so different-sized firms/years can be compared on a common base.

Step 1 — Base: Revenue from operations ₹5,00,000 = 100%.

Step 2 — Each item ÷ 5,00,000 × 100.

• Other income = 20,000 ÷ 5,00,000 × 100 = 4%
• Expenses = 3,00,000 ÷ 5,00,000 × 100 = 60%
• Profit before tax = 5,20,000 − 3,00,000 = ₹2,20,000 = 44%

Common-size Income Statement of Kumar Ltd. for the year ended 31st March 2018

| Particulars | Absolute amount (₹) | % of Revenue from operations |

| --- | --- | --- | …