Common Size Financial Statement Analysis

A common size balance sheet expresses each item on the balance sheet as a percentage of total assets A common size income statement expresses each income statement category as a percentage of total sales revenues 1 2 3 4 Sales 101,840 109,876 115,609 126,974 COGS 78,417 83,506 85,551 93,326 SG A 20,368 24,722 27,168 31,109 PROFIT 3,055 1,648 2,890 2,539 1 2 3 4 Sales 100.0 100.0 100.0 100.0 COGS 77.0 76.0 74.0 73.5 SG A 20.0 22.5 23.5 24.5 PROFIT 3.00 1.50 2.50 2.00 1 2 3 4 Sales 100 108 114 125 COGS 100 106 109 119 SG A 100 121 133 153 PROFIT 100 54 95 83 Problem 4-8 Common size statements Balance Sheet Company 1 2 3 4 5 6 7 8 9 Cash and short-term investments 2 13 37 1 1 3 1 22 6 Receivables 17 8 22 28 23 5 11 16 8 Inventory 15 52 15 23 14 2 2 - 5 Other current assets 6 - 5 1 4 2 2 1 - Current assets 40 73 79 53 42 12 16 39 19 Gross property 86 40 26 44 63 112 65 1 106 Less: Accumulated depreciation (50) (19) (8) (15) (23) (45) (28) - (34) Net property 36 21 18 29 40 67 37 1 72 Investments 3 1 - - 3 14 16 55 - Intangibles and other 21 5 3 18 15 7 31 5 9 Total assets 100 100 100 100 100 100 100 100 100 Trade payables 11 21 22 13 26 7 11 - 20 Debt payable 4 - 3 6 4 6 2 46 4 Other current liabilities 9 43 - - 1 4 1 16 8 Current liabilities 24 64 25 19 31 17 14 62 32 Long-term debt 20 5 12 27 23 34 24 27 21 Other liabilities 16 - 1 21 16 12 13 5 12 Total liabilities 60 69 38 67 70 63 51 94 65 Equity 40 31 62 33 30 37 49 6 35 Total liabilities equity 100 100 100 100 100 100 100 100 100 Income statement Company 1 2 3 4 5 6 7 8 9 Revenues 100 100 100 100 100 100 100 100 100 Cost of goods sold 58 81 58 63 52 - 59 - - Operating expenses 21 7 24 28 33 84 29 55 91 Research development 7 5 9 - 1 - - - - Advertising 3 - 3 2 5 - - - 2 Operating income 11 7 6 7 9 16 12 45 7 Net interest expense 1 (1) - 2 2 6 3 41 1 Income from continuing operations before tax 10 8 6 5 7 10 9 4 6 Asset turnover ratio 0.96 1.12 0.94 1.38 1.82 0.45 0.96