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State the objectives of 'Analysis of Financial Statements'.

Objectives of Analysis Financial Statements:
The following are the various objectives for preparing financial statements.
It enables the conduct of meaningful comparisons of financial data. It provides better and easy understanding of the changes in the financial data overtime. It helps in designing effective plans and better execution of plans by enabling control and checks over the use of the financial resources.
Analysis of Financial Statements helps to know the earning capacity and profitability of a business firm. It also measures the efficiency of the business operations.

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What is meant by a 'Common Size Statement’?

Prepare a Comparative Income Statement from the following information.

2009 2010

Rs. Rs.

Sales 10,00,000 12,50,000
Cost of goods sold 5,00,000 6,50,000
Carriage inwards 30,000 50,000
Operating Expenses 50,000 60,0000
Income Tax 50% 50%

Following is the Income statements of Raj Ltd. For the year ended 31-3-2011:

Particulars	Amount Rs
Income:
Sales	2,00,000
Other Incomes	15,000
Total Income	2,15,000

Expenses:
Cost of goods sold	1,10,000
Operating expenses	5,000
Total Expenses	1,15,000
Tax	40,000

Prepare a common size Income Statements of Raj Ltd. for the year ended 31-3-2011.