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.
Investopedia Commentary
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.
Related Links
Reading The Balance Sheet
Understanding The Income Statement
What Is A Cash Flow Statement?
Advanced Financial Statement Analysis
See also: Accounting, Balance Sheet, Common Size Balance Sheet, Common Size Income Statement, Financial Accounting, Generally Accepted Accounting Principles - GAAP, Income Statement, Revenue