Common-Size Financial Statement
What it is:
How it works (Example):
For example, let's assume that Company XYZ'slooks like this:
The right side of the sales, is a common-size ., which shows each expense as a percentage of
Why it Matters:
Common-size financial statements facilitate easy comparison. Not only can readers easily see how much of every dollar goes to rent, for example, they can compare that percentage to other companies or other periods in time. This allows analysts to compare companies of different sizes and not be "blinded" by the size differences inherent in the raw data.