Common Size Balance Sheet

Common Size Balance Sheet

A balance sheet in which the items are expressed as percentages of total assets or total liabilities instead of as dollar amounts. For example, a common-size statement may express all cash as 10% of total assets, fixed assets as 25%, and so forth. A common-size statement is most useful when one attempts to compare a company to similar companies of different size or when one is comparing year-to-year variations in capital structure in the same company.
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When those calculations are complete, we have what is known as common size balance sheet. Thus, we can readily compare companies of vastly different sizes by comparing the percentages and not the raw dollars.