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 ?
Knowing that analyzing ACJ Company's financial statements would give her valuable insights about its financial position and performance, she prepared common-size financial statements and calculated financial ratios for ACJ and each of its stores for 2016 and 2015.
Emersyn analyzed aggregated account balance data using an array of interrelated data analysis procedures: common-size financial statement analysis, ratio analysis, trend analysis, and internal benchmarking (comparing the financial position and performance of individual stores).
Perform a financial analysis of Whitetracks using financial ratios and common-size financial statements.
* A comparison of common-size financial statements from one period to the next and from one company to industry peers, in order to identify trends in the debt-to-equity structure that may indicate an eroding capital base or a heightened risk of insolvency.
Common-size financial statements also facilitate comparisons among companies of different sizes.
Common-size financial statements are not used just as a scaling factor for standardization but as an initial step in providing insights regarding the economic characteristics of a company and its industry.