Limitations of a Common Size Balance Sheet:
Source: Flat Icons / Flaticon
Change in the price level
Any change in market conditions, inflation, and depreciation are not accounted for in the common size balance sheet, making the comparison of statements for different periods inaccurate.
Source: geotatah / Flaticon
Seasonal fluctuation
Companies can have huge variations due to seasonal factors. Components of balance sheets such as assets and liabilities can be affected by seasonal variations.