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CMA Intermediate · Financial Management and Business Data Analytics · Comparative, Common-Size Financial Statements and Trend Analysis

Meera Industries has total assets of ₹40,00,000 in 2023-24 and ₹50,00,000 in 2024-25. Fixed assets were ₹22,00,000 in 2023-24 and ₹30,00,000 in 2024-25. In common-size balance sheets, by how many percentage points did the share of fixed assets in total assets change, and in which direction?

The share of fixed assets rose by 5 percentage points. It was 55% of total assets (22/40) in 2023-24 and 60% (30/50) in 2024-25. The 36.4% figure is the growth in fixed assets, not the change in common-size share.

  1. AIncreased by 5 percentage pointsCorrect
  2. BIncreased by 8 percentage points
  3. CIncreased by 36.4 percentage points
  4. DDecreased by 5 percentage points

Explanation

2023-24 share = 22/40 × 100 = 55%. 2024-25 share = 30/50 × 100 = 60%. Change = 5 percentage points upward. Option C is the percentage growth in fixed assets (8/22 = 36.4%), which is not a change in the common-size share, and option B is the rupee change in lakhs.

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