Wipro Limited, together with its subsidiaries and equity accounted investees (collectively, €˜Wipro€™) is a leading India-based provider of IT Services, including Business Process Outsourcing (€˜BPO€™) services, globally. Further, Wipro has other businesses such as IT Products, Consumer Care and Lighting and Infrastructure engineering. Wipro shares are listed on the Bombay Stock Exchange and National Stock Exchange of India. The Company€™s American Depository Shares representing equity shares are also listed on the New York Stock Exchange. We provide below the consolidated income statements for the financial years ended 31 March 2010, 2011 and 2012 (source: Form 20F 2012).

The 2009 Form 20F shows that revenue for that year was 256,891 million Rupees. The consolidated financial statements of the group have been prepared in accordance with IFRS. The income statement is presented by function. However, in the Notes to the financial statements, the group publishes a breakdown by nature of expenses (Total cost of revenues, selling and marketing expenses and general and administrative expenses), see below.

Required
1. Prepare the common-size income statements by function.
2. With the help of Note 22, restate the income statement and prepare the statement of intermediate balances, in value and in percentage of sales.
3. Analyze the income statement on the basis of the format by function.
4. Analyze the income statement on the basis of the format by nature (statement of intermediate balances).
5. What are the comparative benefits of each analysis for a decision maker? Assume you are an investor looking to invest in Wipro.

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Consolidated statements of incomel (as reported) Rupees in millions, Years ended March 31 Revenues Cost of revenues Gross profit Selling and marketing expenses General and administrative expenses Foreign exchange gains/(losses), net Results from operating activities Finance expense Finance and other income Share of profits of equity accounted investees Profit before tax Income tax expense Profit for the year 2010 20112012 271,97 310,542 371,971 186,299(212,808) (263,173) 85,658 97,734 108,798 (18,608)(22,172 27,777) (14,823)18,339) (20,286 (383) 51,844 3,278 64,013 445 57,668 1324 (1.933)(3491) 4,360 530 55410 (9,294) 46,116 6,652 63,035 53,321 8,895 648 69,750 (9,714)(13,763) 55,987 Note 22 Expenses by nature 201020112012 Employee compensaton Raw materials, firished goods, process stocks and stores and spares consumed Sub contracting/technical fees/third party application Travel Depreciation and amortization 107,230126,867 154,066 51,813 50,166 60,270 17,527 10,156 34,210 8,064 26,41512,609 7,838,2110,129 5,020 5,2539,455 4,534 5,1146,583 3,1573,492 4,007 3,0623,2303,734 1,797 2,427 2,862 1,593 1,6291,818 1,023 13241,883 1,487 Power and fuel Legal and professional fees Rates, taxes and insurance Carriage and freight Provision for doubtful debt Miscellaneous expenses 950 1,181 7,729 Total cost of revenues, selling and marketing expenses and general and administrative 219,730 253.319 311,236 5,5637,455