Common-size statement can be prepared with three columns. Following are the steps to be followed in preparation of common-size statement:
(i) Column 1: In this column, particulars of items of income statement or balance sheet are written.
(ii) Column 2: Enter absolute amount.
(iii) Column 3: Choose a common base as 100. For example, revenue from operations can be taken as the base for income statement and total of balance sheet can be taken as the base for balance sheet. Work out the percentage for all the items of column 2 in terms of the common base and enter them in column 3.
Format of common-size statement:

Particulars	Absolute amount	Percentage

A comparative statement has five columns. Following are the steps to be followed in preparation of the comparative statement.
(i) Column 1: In this column, particulars of items of income statement or balance sheet are written.
(ii) Column 2: Enter absolute amount of year 1
(iii) Column 3: Enter absolute amount of year 2
(iv) Column 4: Show the difference in amounts between year 1 and year 2. If there is an increase in year 2, put plus sign and if there is decrease put minus sign.
(v) Column 5: Show percentage increase or decrease of the difference amount shown in column 4 by dividing the amount shown in column 4 (absolute amount of increase or decrease) by column 2 (year 1 amount). That is,
Percentage increase or decrease
\(\frac{Absolute \ amount \ of \ increase \ or \ decrease}{Year \ 1 \ amount}\times100\)
Format of comparative statement:

Particular	Year 1	Year 2	Absolute amount of increase (+) or Decrease (-)	Percentage increase (+) ordecreases (-)
	Rs.	Rs.	Rs.
(1)	(2)	(3)	(4)	(5)

(i) Give only interim reports:
Financial statements are prepared at the end of every accounting period. But the actual position of the business can be known only when the business is closed.
(ii) LImited access to external users:
The external users do not have detailed and frequent information of financial results as they have limited access
(iii) Influenced by personal judgement:
Preparation of financial statements may be influenced by personal judgements and therefore these are not free from bias.

(i) Cash flow analysis is concerned with preparation of cash flow statement which shows the inflow and outflow of cash and cash equivalents in a given period of time.
(ii) Cash includes cash in hand and demand deposits with banks.
(iii) Cash equivalents denote short term investments which can be realised easily within a short period of time, without much loss in value.
(iv) Cash flow analysis helps in assessing the liquidity and solvency of a business concern

The nature of financial statement is historical. Past cannot be the index of future and cannot be cent percent basisi for future estimation forecasting budgeting and planning.

Trend analysis for Kavitha Ltd.

Particular	Rs. in thousands			Trends percentage
	2015-16	2016-17	2017-18	2015-16	2016-17	2017-18
Revenue from operations	300	270	150	100	90	50
Add: Other income	50	80	60	100	160	120
	350	350	210	100	100	60
Less: Expenses	250	200	125	100	80	50
Project before tax	100	150	85	100	150	85
Less Income tax (30%)	40	60	34	100	150	85
Profit after tax	60	90	51	100	150	85

Note: 2016 - 17.
Percentage for Revenue from operation = \(\frac{270}{300}\) x 100 = 90%
Percentage of other income = \(\frac{80}{50}\) x 100 = 160%
Percentage for expenses = \(\frac{200}{250}\) x 100 = 80%
Percentage for before tax = \(\frac{150}{100}\) x 100 = 150%
Percentage for profit after tax = \(\frac{90}{60}\) x 100 = 150%
In 2017 - 18.
Percentage for revenue from operations = \(\frac{150}{300}\) x 100 = 50%
Percentage for other income = \(\frac{60}{50}\) x 100 = 120%
Percentage for expenses = \(\frac{125}{250}\) x 100 = 85%
Percentage for profit before tax = \(\frac{85}{100}\) x 100 = 85%
Percentage for income tax 40% = \(\frac{34}{40}\) x 100 = 85%

Trend analysis for Kavitha Ltd.

Particular	Rs. in thousands			Trends percentage
	2015-16	2016-17	2017-18	2015-16	2016-17	2017-18
Revenue from operations	100	125	150	100	125	150
Add: Other income	20	25	30	100	125	150
Total revenue	120	150	180	100	125	150
Less: Expenses	100	120	80	100	120	80
Project before tax	20	30	100	100	150	500
Less Income tax (30%)	6	9	30	100	150	500
Profit after tax	14	21	70	100	150	500

Note: 2016 -17
Percentage for Revenue from operations = \(\frac{125}{100}\) x 100 = 125%
Percentage of other income = \(\frac{25}{20}\) x 100 = 125%
Percentage of total revenue = \(\frac{150}{120}\) x 100 = 125%
Percentage for expenses = \(\frac{120}{100}\) x 100 = 120%
Percentage for before tax = \(\frac{30}{20}\) x 100 = 150%
Percentage for profit before tax = \(\frac{21}{14}\) x 100 = 150%
In 2017 - 18
Percentage for revenue from operations = \(\frac{150}{100}\) x 100 = 150%
Percentage for other income = \(\frac{25}{20}\) x 100 = 125%
Percentage of total revenue \(\frac{180}{120}\) x 100 = 150%
Percentage for expenses = \(\frac{80}{100}\) x 100 = 80% 
Percentage for profit before tax = \(\frac{100}{20}\) x 100 = 500%
Percentage for profit after tax = \(\frac{70}{14}\) x 100 = 500%

Common-size balance sheet of Meena Ltd as on 31^st March, 2018

Particulars	Absolute amounts Rs.	Percentage of total assets
I Equity and Liabilities
Share holder's funds	2,00,000	50
Non-current liabilities	1,60,000	40
Current liabilities	40,000	10
Total	4,00,000	100
II Assets
Non-current assets	3,00,000	75
Current assets	1,00,000	25
Total	4,00,000	100

Note:
Percentage for share holders funds = \(\frac{2,00,000}{4,00,000}\) x 100 = 50%
Percentage for Non-current liabilities = \(\frac{1,60,000}{4,00,000}\) x 100 = 40%
Percentage for current liabilities = \(\frac{40,000}{4,00,000}\) x 100 = 10%
Percentage for Non-current assets = \(\frac{3,00,000}{4,00,000}\) x 100 = 75%
Percentage for current assets = \(\frac{1,00,000}{4,00,000}\) x 100 = 25%

Common-size income statement of Sam Ltd for the year ended 31^st March, 2016 and 31^st March, 2017

Particulars	Absolute amount 2015-16	Percentage of revenue from operations for 2015-16	Absolute amount 2016-17	Percentage of revenue from operations for 2016-17
	Rs.	Rs.	Rs.
Revenue from Operations	4,00,000	100	5,00,000	100
Add: Other income	80,000	20	50,000	10
Total revenue	4,80,000	120	5,50,000	110
Less: Expenses	2,40,000	60	2,50,000	50
Profit before tax	2,40,000	60	3,00,000	60
Less: Income tax (30%)	72,000	18	90,000	18
Profit after tax	1,68,000	42	2,10,000	42

Note: In 2015-16
Percentage for other income = \(\frac{80,000}{4,00,000}\) \(\times\) 100 = 20%
Percentage for Total revenue = \(\frac{4,80,000}{4,00,000}\) \(\times\) 100 = 120%
Percentage for Expenses \(\frac{2,40,000}{4,00,000}\) \(\times\) 100 = 60%
Percentage for Profit before tax = \(\frac{2,40,000}{4,00,000}\) \(\times\) 100 = 60%
Percentage for tax = \(\frac{72,000}{4,00,000}\) x 100 = 18%
Percentage for Profit after tax = \(\frac{1,68,000}{4,00,000}\) \(\times\) 100 = 42%
In 2016-17
\(\frac{50,000}{5,00,000}\) \(\times\) 100 = 10%
\(\frac{5,50,000}{5,00,000}\) \(\times\) 100 = 10%
\(\frac{2,50,000}{5,00,000}\) \(\times\) 100 = 50%
\(\frac{3,00,000}{5,00,000}\) \(\times\) 100 = 60%
\(\frac{90,000}{5,00,000}\) \(\times\) 100 = 18%
\(\frac{2,10,000}{5,00,000}\) \(\times\) 100 = 42%

Comparative income statement of Barani Ltd. for the years ended 2017 and 2018 Particulars 2016-17 Rs. 2016-17 Rs. Absolute amount
of increase (+) or
decrease (-) Percentage
increase (+) or
decrease (-) Revenue from Operations 30,000 45,000 + 15,000 + 50 Add: Other income 4,000 6,000 + 2,000 + 50 Total revenue 34,000 51,000 + 17,000 + 50 Less: Expenses 10,000 15,000 + 5,000 + 50 Profit before tax 24,000 36,000 + 12,000 + 50 Less: Tax (30%) 7,200 10,800 + 3,600 + 50 Profit after tax 16,800 25,200 + 8,400 + 50 Note:
Percentage increase for revenue from operations = \(\frac{15,000}{30,000}\times100\) = 50%
Percentage increase for other incomes = \(\frac{2000}{4000}\times100\) = 50%
Percentage increase for expenses = \(\frac{5,000}{10,000}\times100\) = 50%
Percentage increase for Tax = \(\frac{3,600}{7,200}\times100\) = 50%

Trend analysis for Mullai Ltd

Particulars	Rs.in lakhs			Trend percentages
	2015-16	2015-16	2017-18	2015-16	2016-17	2017-18
Revenue from operations	100	120	160	100	120	160
Add: Other income	20	24	20	100	120	100
Total revenue	120	144	180	100	120	150
Less: Expenses	20	14	40	100	170	200
Profit before tax	100	130	140	100	130	140
Less: Income tax (30%)	30	39	42	100	130	140
Profit after tax	70	91	98	100	130	140

Trend analysis for Kurinji Ltd

Particulars	Rs.in thousands			Trend percentages
	2015-16	2016-17	2017-18	2015-16	2016-17	2017-18
Revenue from operations	120	132	156	100	110	130
Add: Other income	50	38	65	100	76	130
Total revenue	170	170	221	100	100	130
Less: Expenses	100	135	123	100	135	123
Profit	70	35	98	100	50	140

Computation of trend percentage for revenue from operations:
For 2016-17: \(\cfrac { 132 }{ 120 } \times 100=110\)%
For 2017-18: \(\cfrac { 156 }{ 120 } \times 100=130\)%

Common-size income statement for the year ended 31^st March, 2019

Particulars	Mani Ltd		Kani Ltd
	Absolute amount	Percentage of revenue from operations	Absolute amount	Percentage of revenue from operations
	Rs.	Rs.	Rs.
Revenue from operations	2,00,000	100	2,50,000	100
Add: Other income	30,000	15	25,000	10
Total revenue	2,30,000	115	2,75,000	110
Less: Expenses	1,10,000	55	1,25,000	50
Profit before tax	1,20,000	60	1,50,000	60

Comparative income statement of Mary Co. Ltd for the years ended 31^st March, 2016 and 31^st March, 2017

Particulars	2015-16	2016-17	Absolute amount of increase ( +) or decrease (–)	Percentage increase (+) or decrease (–)
	Rs.	Rs.	Rs.
Revenue from operations	4,00,000	5,00,000	+1,00,000	+25
Less: Operating expenses	2,00,000	1,80,000	–20,000	–10
Profit before tax	2,00,000	3,20,00	+1,20,000	+60
Less: Income tax	40,000	1,60,000	+1,20,000	+300
Profit after tax	1,60,000	1,60,00

Calculation of income tax:
For 2015 - 16: 2,00,000 \(\times\) 20% = Rs 40,000
For 2016 - 17: 3,20,000 \(\times\) 50% = Rs.1,60,000

Comparative income statement of Abdul Co. Ltd for the years ended 31^st March, 2016 and 31^st March, 2017

Particulars	2015-16	2016-17	Absolute amount of increase (+) or decrease (–)	Percentage increase (+) or decrease (–)
	Rs.	Rs.	Rs.
Revenue from operations	3,00,000	3,60,000	+60,000	+20
Add: Other income	1,00,000	60,000	–40,000	–40
Total revenue	4,00,000	4,20,000	+20,000	+5
Less: Expenses	2,00,000	1,80,000	–20,000	–10
Profit before tax	2,00,000	2,40,000	+40,000	+20
Less: Tax (30%)	60,000	72,000	+12,000	+20
Profit after tax	1,40,000	1,68,000	+28,000	+20