Prepare a common‑size statement of profit and loss for the following data, expressing each item as a percentage of sales: Sales = Rs. 20,00,000; Cost of Goods Sold = Rs. 12,00,000; Administrative Expenses = Rs. 1,50,000; Selling Expenses = Rs. 1,20,000; Net Profit = Rs. 2,00,000.

Step-by-step solution

1. Calculate each percentage as $\frac{\text{Item}}{\text{Sales}}\times 100$.
2. Sales is the base, so its percentage is 100% by definition.
3. COGS: $\frac{12,00,000}{20,00,000}\times 100=60.0\%$.
4. Administrative: $\frac{1,50,000}{20,00,000}\times 100=7.5\%$.
5. Selling: $\frac{1,20,000}{20,00,000}\times 100=6.0\%$.
6. Net Profit: $\frac{2,00,000}{20,00,000}\times 100=10.0\%$.

Concept tested: Common‑size statements

Published 10 October 2026 · How this solution was prepared and checked