Common Size Financial Statement

Common Size Financial Statement is a company financial statement that shows all items as percentages of a common base figure. This kind of financial statement permits for simple analysis between companies or among time periods of a company.

The values on the common size statement are shown as percentages of a statement component like revenue. Whereas most firms don't show their statements in common size, it is advantageous to calculate if you want to examine two or more companies of differing size against each other. 

Formatting financial statements in this way lessens the bias that can takes place when evaluating companies of differing sizes. It also permits for the analysis of a company over different time periods, revealing, for instance, what percentage of sales is cost of goods sold and how that price has changed over time.

 

 

Posted Date: 7/25/2012 8:20:55 AM | Location : United States

Ask an Expert

Related Discussions:- Common size financial statement, Assignment Help, Ask Question on Common size financial statement, Get Answer, Expert's Help, Common size financial statement Discussions

Write discussion on Common size financial statement
Your posts are moderated

Write your message here..

Related Questions

Cost of equity share capital, Q. Cost of Equity Share Capital? Cost of ... Q. Cost of Equity Share Capital? Cost of Equity Share Capital: - The cost of equity is the utmost rate of return that the company should earn on equity financed position of its

Real Estate Finance, 1. Consider the following cash flows and reversion: T... 1. Consider the following cash flows and reversion: There is an $80,000 cash outflow at time zero. BTCFs for years 1-4, respectively, are $10,000, $20,000, $20,000, and $25,000.

Gordan model, A company has a total investment of Rs 500,000 in assets, and... A company has a total investment of Rs 500,000 in assets, and 50,000 outstanding ordinary shares at Rs 10 per share (par value). It earns a rate of 15 per cent on its investment, a

Forms of bank finance, Q. Forms of Bank Finance? A firm can draw funds ... Q. Forms of Bank Finance? A firm can draw funds from a bank within the maximum credit limit sanctioned. It can draw funds in the following forms: 1) Overdraft 2) Cash Cre

Determine the valuing equity securities, Determine the Valuing Equity Secur... Determine the Valuing Equity Securities Unlike debt and money market instruments, equity instruments represent ownership interest in the company. As owners should put in their

#WACC, Filer Manufacturing has 8.9 million shares of common stock outstandi... Filer Manufacturing has 8.9 million shares of common stock outstanding. The current share price is $59, and the book value per share is $4. Filer Manufacturing also has two bond is

Currency, You have the following limited information upon which to base you... You have the following limited information upon which to base your decision as to which is the better of two alternative funding arrangements: ? Alternative 1 is to arrange funding

Leverage, evaluate the importance of leverage in financial management of a ... evaluate the importance of leverage in financial management of a small scale company

Trade credit is free credit agree or disagree, Trade credit is free credit.... Trade credit is free credit.  Do you agree or disagree with this statement?  Explain. Trade credit isn't free.  It has a value.  Who bears that cost depends on the conditions o

Define risk relate with large amount of short term financing, What are the ... What are the risks related with using a large amount of short-term financing for working capital? Using a large amount of short-term financing usually permits funds to be raised