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

Types of working capital policy, aggressive policy aggressive policy

Define the implications of the interest rate parity, Discuss the implicatio... Discuss the implications of the interest rate parity for the exchange rate determination. Answer: Presume that the forward exchange rate is roughly an unbiased predictor of the

Call and notice money, These funds represent borrowings made for a pe... These funds represent borrowings made for a period of one day to upto a fortnight. However, the mechanism adopted to lend funds to the call and the notice money m

Financial planning, financial planning? financial planning?

Market versus capital market, For what kinds of needs do you think a firm w... For what kinds of needs do you think a firm would issue securities in the money market versus the capital market?

Modern approach, Meaning merits nd demerits of modern approch of financial ... Meaning merits nd demerits of modern approch of financial management

Leverage, what is leverage what is leverage

Describe modigliani and miller approach of capital structure, Q. Describe M... Q. Describe Modigliani and Miller Approach of Capital Structure? Ans. Modigliani as well Miller Approach: - The Modigliani-Miller approach is alike to the net operating income

Coupon curve duration, Market price is used for determining the dura... Market price is used for determining the duration of a mortgage-backed security in the coupon curve duration. This approach to calculate the duration of mortgage-bac

Explain the flow of goods and paper work, Explain the flow of goods and pap... Explain the flow of goods and paper work in Diagram on Page 74 Ed. 10 [P. 70  in Ed. 9] of your textbook.  Explain a.  how the transaction would work without a Letter of Credi