Question

From the following information, prepare a Comparative Statement of Profit and Loss: Comparative Statement of Profit and Loss for the years ended 31st March, 2022 and 2023: \[ \begin{array}{|l|r|r|r|} \hline Particulars & 2022–23 (\rupee) & 2021–22 (\rupee) & \% Change
\hline \text{Revenue from Operations} & 10,00,000 & 8,00,000 & 25\%
\hline \text{Employee Benefit Expenses} & 2,50,000 & 2,00,000 & 25\%
\hline \text{Other Expenses} & 5,50,000 & 4,00,000 & 37.5\%
\hline \text{Profit Before Tax (PBT)} & 2,00,000 & 2,00,000 & 0\%
\hline \text{Tax Expense (50\%)} & 1,00,000 & 1,00,000 & 0\%
\hline \text{Profit After Tax (PAT)} & 1,00,000 & 1,00,000 & 0\%
\hline \end{array} \] \vspace{0.5cm}

Hint:

A comparative statement provides insights into trends and performance over time. Use the percentage change column to identify areas of improvement or concern, such as disproportionate increases in expenses.

Answer 1

1. Purpose of Comparative Statement: - Comparative financial statements illustrate year-over-year changes in both absolute values and percentages. - They facilitate analysis of trends in revenue, expenses, and profitability. 2. Key Observations: - Both revenue and employee benefit expenses saw a 25% increase. - Other expenses rose by 37.5%, which counteracted the revenue increase, resulting in Profit After Tax remaining constant.