Common-Base-Year Analysis

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Common-base-year analysis

The representing of accounting information over multiple years as percentages of amounts in an initial year.

In accounting and statistics, the expression of financial information in a given year as a percentage of an amount in an initial year. A company may treat the first year of its operations or the first year it made a profit as the base year, and express all financial information in those terms. For example, it may issue statements saying that profits in year five were 125% of year one's profits. Occasionally, governments or companies may change the base year to one that is more representative of "normal" performance.

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