Common Size Financial Statement


DEFINITION of 'Common Size Financial Statement'

A company financial statement that displays all items as percentages of a common base figure. This type of financial statement allows for easy analysis between companies or between time periods of a company.

BREAKING DOWN 'Common Size Financial Statement'

The values on the common size statement are expressed as percentages of a statement component such as revenue. While most firms don't report their statements in common size, it is beneficial to compute if you want to analyze two or more companies of differing size against each other.

Formatting financial statements in this way reduces the bias that can occur when analyzing companies of differing sizes. It also allows for the analysis of a company over various time periods, revealing, for example, what percentage of sales is cost of goods sold and how that value has changed over time.

  1. Revenue

    The amount of money that a company actually receives during a ...
  2. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  3. Common Size Balance Sheet

    A balance sheet that displays both the numeric value of all entries, ...
  4. Accounting

    The systematic and comprehensive recording of financial transactions ...
  5. Financial Accounting

    The process of recording, summarizing and reporting the myriad ...
  6. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
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