Advantages of a Common Size Balance Sheet

Source: ucoyxmasayun / Freepik

Source: Freepik / Flaticon

Easy to understand: A common size balance sheet is created in a way that is easily understandable and analyzed. It gives the ratio of items considering the total assets/liabilities of the company as a base.

Comparison at a glance: A balance sheet is created to give an overview at a glance. A common size balance sheet is created to help compare the percentages and evaluate the changes in percentages at a glance.

Source: Eucalyp / Flaticon

Source: juicy_fish / Flaticon

Helps in measuring time-series analysis: The percentage share of every component in the total assets and liabilities is measured in the common size balance sheet.