Convert the following statement of profit and loss of BCR Co. Ltd. into the comparative statement of profit and loss of BCR Co. Ltd.:
| Particulars | Note No. | 2015-16 (₹) | 2016-17 (₹) |
|---|---|---|---|
| (i) Revenue from operations | 60,00,000 | 75,00,000 | |
| (ii) Other incomes | 1,50,000 | 1,20,000 | |
| (iii) Expenses | 44,00,000 | 50,60,000 | |
| (iv) Income tax | 35% | 40% |
Place both years side by side, compute Total Revenue = Revenue from operations + Other incomes, deduct Expenses for Profit before tax, then charge each year's own tax rate. Every line then gets an absolute change and a percentage change (on the first-year figure). Profit after tax rises from ₹11,37,500 to ₹15,36,000 — up 35.03%.
Concept
A comparative statement of profit and loss is a form of horizontal analysis — it compares the revenues, expenses and profits of two accounting periods so you can see the direction and size of change in each item. This is one of the core tools of the CBSE Class 12 Accountancy / NCERT chapter on analysis of financial statements. The percentage change is always worked out on the first (earlier) year's figure.
Working Notes
- Total Revenue = Revenue from operations + Other incomes → 2015-16: ₹61,50,000; 2016-17: ₹76,20,000.
- Profit before tax = Total Revenue − Expenses → 2015-16: ₹17,50,000; 2016-17: ₹25,60,000.
- Tax = rate × profit before tax → 2015-16: 35% of ₹17,50,000 = ₹6,12,500; 2016-17: 40% of ₹25,60,000 = ₹10,24,000.
- Other incomes fell during the year, so the change is a decrease, shown in brackets.
Solution
Comparative Statement of Profit and Loss of BCR Co. Ltd. for the years ended March 31, 2016 and 2017
| Particulars | 2015-16 (₹) | 2016-17 (₹) | Absolute Increase (+)/ Decrease (–) (₹) | Percentage Increase (+)/ Decrease (–) (%) |
|---|---|---|---|---|
| I. Revenue from operations | 60,00,000 | 75,00,000 | 15,00,000 | 25.00 |
| II. Add: Other incomes | 1,50,000 | 1,20,000 | (30,000) | (20.00) |
| III. Total Revenue (I + II) | 61,50,000 | 76,20,000 | 14,70,000 | 23.90 |
| IV. Less: Expenses | 44,00,000 | 50,60,000 | 6,60,000 | 15.00 |
| Profit before tax | 17,50,000 | 25,60,000 | 8,10,000 | 46.29 |
| V. Less: Tax | 6,12,500 | 10,24,000 | 4,11,500 | 67.18 |
| Profit after tax | 11,37,500 | 15,36,000 | 3,98,500 | 35.03 |
Compute the percentage change on the first year's figure, not the second year's. A fall in an item (like Other incomes here) is shown in brackets in both change columns.
Profit after tax grew from ₹11,37,500 to ₹15,36,000 — an increase of ₹3,98,500 (35.03%). Although revenue climbed 25% and profit before tax 46.29%, the higher 40% tax rate (up from 35%) absorbed a larger share, holding the after-tax growth to 35.03%.
Unlock everything free for 14 days
- Full step-by-step solutions
- Concept-first explanations
- Methods, shortcuts & mistakes
- PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.