Common Size Balance Sheet

  

Categories: Accounting

Brevity is the soul of wit. It’s also a preference of market analysts who want an easy way to understand the size and percentage of capital allocations on a company’s balance sheet.

Common size balance sheets provide the value and percentage of total assets, liabilities, and equity accounts all on the same page. Those percentages offer an easy way to compare proportions of assets, liabilities, and equity across multiple companies in the same sector or different industries.

It’s an extremely good way to visualize where money is coming from and going to over long-term time horizons, in order to see how a company’s financials are changing. The itemization of percentages is not required by any agency or association. The process is just really nice to have, and they’ll get you brownie points with executives who have little time on their hands.

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everything including their balance sheets consolidate let's hope they

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generate lots of tiny cash flows and credits in the future....Mazel Tov

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