COMMON SIZE FINANCIAL STATEMENT

COMMON SIZE FINANCIAL STATEMENT DEFINITION

• A common size financial statement 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. The values on the common size statement are expressed as percentages of a statement component, such as revenue.
• The common size size ratio for each line on the financial statement is calculated as follows 

Common Size Ratio = Item of interest/Reference Item (item of interest divided by reference item)

Common Size Income Statement

• The income statement, also referred to as the profit and loss (P&L) statement, provides an overview of sales, expenses and net income. 
• The income statement equation is sales minus expenses equals net income. This is why the common size income statement defines all items as a percentage of sales.

Common Size Balance Sheet Statement

•  The balance sheet equation is assets equals liabilities plus stockholders' equity. As a result, analysts define the balance sheet as a percentage of assets.

Common Size Cash Flow Statement

•  The cash flow statement is divided between cash flows from operations, cash flows from investing and cash flows from financing.  
• The popular version of common size expresses cash flow in terms of total operational cash flow for items in cash flows from operations, total investing cash flows for cash flows from investing activities and total financing cash flows for cash flows from financing activities.

Source: Common Size Financial Statement Definition | Investopedia http://www.investopedia.com/terms/c/commonsizefinancialstatement.asp#ixzz4butX6FxV http://www.netmba.com/finance/statements/common-size/