How To Read A Common Size Income Statement

A common size income statement is an income statement whereby each line item is expressed as a percentage of revenue or sales.
How to read a common size income statement. It is not another type of income statement but it is just one type of technique used by financial managers to analyze the income statement of a. To analyze an income statement we looked at the rationale for converting the income statement to common size. This type of analysis will let you see how revenues and the spending on different types of expenses change from one. If you have more than one year of financial data you can compare income statements to see your financial progress.
The common size percentages help to show how each line item or. Common size income statement analysis states every line item on the income statement as a percentage of sales.