Common size financial statement, Financial Management

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







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
Related Questions
Should a company pursue price hike or focus on increasing sales volume

How to compare minimax and maximin with figures and commentary ?

should a company pursue price hike or focus on increased sales

Credit enhancement of an asset-backed security implies the existence of support for one or more of the bondholders in the structure. Credit enhancement levels var

ACT presently is all-equity financed. This reflects the stance of the former CEO, a dominant personality who stated repeatedly: "I don't want us to be in thrall to the demands of t

Use the excel spreadsheet to project the net income for Winnebago from assumptions about key revenue & expense items.   Use the following assumptions to evaluate the projected net

1.      Consider the following two investment alternatives   Net cash flow   End of year Machine A Machine

7. Bill Peters is the investment officer of a $60 million pension fund. He has become concerned about the big price swings that have occurred lately in the fund’s fixed income sec

Why do analysts calculate financial ratios? Ratios are comparative measures.  For the reason that the ratios show relative value, they permit financial analysts to compare inf

SCOPE OF FINANCE FUNCTIONS The functions of Financial Manager can generally be sub-divided into two: The Routine functions and the Managerial Functions. Managerial Finance F