Question

What is meant by Common Size Statements? Mention any two uses of common
Size Statements.
Or​

Answer 1

A commonsize statement is a income statement in which each line item are expressed as a percentage of sale or assets, respectively.

Uses-

Commonsize statement is used to analyze and compar the performance with in several years and also compare with in two companies.

Answer 2

A common size statement is a type of financial statement analysis and interpretation. Vertical analysis is another name for it. This method examines financial statements by calculating each line item as a percentage of the base amount for the accounting period in question.

Uses of common size statement

• Income statements- An income statement depicts a company's revenue and spending over a specific time period. An income statement's goal is to show how revenues are converted into net income or net profit
• Balance sheets- The financial balance of an organisation is summarised on a balance sheet. It shows the assets, liabilities, and shareholder equity of a corporation for a given accounting period