A common-size analysis converts each line of financial statement data to an easily comparable amount measured in percent form.

Question

Quizplus · Accepted Answer

A common-size analysis expresses each line item on a financial statement as a percentage of a base amount, such as total assets, total revenue, or total expenses. This allows for easier comparison among companies of different sizes or within the same company over time.

A Common-Size Analysis Converts Each Line of Financial Statement Data