Common size financial statements, Accounting Basics

Common size Financial Statements:  

Below this process, the total of the tasks side and the total of the possessions side of a Balance Sheet are taken as 100 and each item in the exacting side is expressed as a percentage of the total. In further words, the entire Balance Sheet or Income statement is transformed into percentage form and articulated as such. In common-size income statements, all items are spoken as a percentage of total sales, while in common-size balance sheets, all items are uttered as a percent of total assets. The statements organized therefore are recognized as relative common size income statement/Balance Sheet.

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Once arranging the data and calculating the percentages, the prearranged data is analysed to draw significant inferences about the operational presentation of the business.

Posted Date: 10/15/2012 5:53:53 AM | Location : United States

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