Common-Size Financial Statement
What is a Common-Size Financial Statement?
How Does a Common-Size Financial Statement Work?
For example, let's assume that Company XYZ'slooks like this:
The right side of the sales, is a common-size ., which shows each expense as a percentage of
Why Does a Common-Size Financial Statement Matter?
Common-size financial statements facilitate easy comparison. Not only can readers easily see how much of every dollar goes to rent, for example, they can compare that percentage to other companies or other periods in time. This allows analysts to compare companies of different sizes and not be "blinded" by the size differences inherent in the raw data.
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