common-size statement

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Common-size statement

A statement in which all items are expressed as a percentage of a base figure, useful for purposes of analyzing trends and changing relationship among financial statement items. For example, all items in each year's income statement could be presented as a percentage of net sales.

Common-Size Statement

Any financial statement in which the items are expressed as percentages of some figure instead of as dollar amounts. For example, a common-size statement may express all cash inflows as a percentage of total revenue. A common-size statement is most useful when one attempts to compare a company to similar companies of different size. It is also called a one hundred percent statement.

common-size statement

A financial statement that has variables expressed in percentages rather than in dollar amounts. For example, items on an income statement are shown as a percentage of revenue or sales, and balance sheet entries are displayed as a percentage of total assets. Common-size statements are used primarily for comparative purposes so that firms of various sizes can be equated. Also called one hundred percent statement.
References in periodicals archive ?
A third tool that can be used is common size statements. The items in the statement of net assets can be stated as a percentage of total assets, and the items in the statement of activities can be stated in terms of either total general revenues or total expenses.
Common size statements are computed for each individual statement in an industry group, and then all the figures are added and averaged.
Even when the size of firms differs, common size statements allow the accountant to compare characteristics of the firms' financing and operating activities.