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5.8 Analysis of Financial Statements—CBSE XII
Illustration 4.
Revenue and expense data for the year ended 31st March, 2024 of Star Paper Mills Limited
and for the Paper Industry are as follows:
Star Paper Mills Limited data is expressed in rupees, the Paper Industry data is expressed
in percentage.

Particulars Note No. `
I. Income
Revenue from Operations 1 70,00,000
Other Income 35,000
Total 70,35,000
II. Expenses
Cost of Materials Consumed 48,00,000
Changes in Inventories of Finished Goods and WIP 2 2,40,000
Employees Benefit Expenses 5,74,000
Other Expenses 3 9,24,000
Total 65,38,000
III. Profit (I – II) 4,97,000

Notes to Accounts
1. Revenue from Operations `
Gross Sales 70,70,000
Less: Returns 70,000
70,00,000
2. Changes in Inventories of Finished Goods and WIP
WIP: Opening Inventory 4,50,000
Less: Closing Inventory 4,00,000
A. 50,000
Finished Goods: Opening Inventory 4,00,000
Less: Closing Inventory 2,10,000
B. 1,90,000
Total (A + B) 2,40,000
3. Other Expenses
General Expenses 4,34,000
Miscellaneous Expenses 84,000
Provision for Tax 4,06,000
9,24,000

Revenue and Expense data of Paper Industry is as follows:
Cost of Materials Consumed 67.00%
Changes in Inventories of Finished Goods and WIP 3.00%
Employees Benefit Expenses 9.20%
Other Income 0.60%
Other Expenses 9.40%
Income Tax 5.50%
(i) Prepare Common-size Statement of Profit & Loss (Income Statement) comparing
the results of operations of Star Paper Mills Limited with the industry average.
(ii) Analyse the data and comment on significant relationships revealed by the comparisons.