Analysis of Profitability through Common Size Profit and Loss Statement

Abstract

A business cannot exist without profit and an economy cannot exist without sound business. Profits must be something for all to be proud of they should not be suspected. In India, public enterprises utilize such a large proportion of nation’s resources that they should run efficiently and contribute to the growth of the economy and welfare of the community. Profit making is seldom the primary objective of public undertakings. The theories of profit propounded by economists from time to time such as ‘Risk Theory of Hawley’, ‘Rent Theory of Walker’, ‘Uncertainty Bearing Theory of Knight’, and ‘Dynamic Theory of J.B. Clark’, have failed to accord a precise unequivocal meaning to this term. And with the advent of socialistic philosophy which looks at profit from an entirely different angle, the controversy has further depended. The main objectives of the present research work are to study that how assets and liabilities are managed by State Financial Corporations and how does it affect profitability through common size profit & Loss. This study will help the Rajasthan Financial Corporations in improving their assets-liabilities management efficiency and hence profitability. The suggested ways and means of practical significance for improving the techniques relating to profitability, capital structure etc. will improve the financial performance and working of the corporations.