What is a Common-Size Balance Sheet?
A common-size balance sheet is a balance sheet in which each line item is expressed as a percentage of assets.
How Does a Common-Size Balance Sheet Work?
For example, let's assume that Company XYZ'slooks like this:
The right-most column on this, which shows each line item as a percentage of assets, is a common-size .
Why Does a Common-Size Balance Sheet Matter?
Common-size balance sheets facilitate easy comparison. Not only can readers easily see how a company's analysts to compare companies of different sizes and not be "blinded" by the size differences inherent in the raw data.is allocated, they can compare those percentages to other companies or other periods in time. This allows
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
A sharp plunge on Monday, a stunning rebound Tuesday, another pullback Wednesday. When will it all end? It's increasingly clear that very low...Read More →