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The common-size percent for cash equals is 6.157 % or 6.16 % (approx). Line items are shown as a percentage of a single chosen or common figure in a financial statement of common size. It is simpler to study a company over time and evaluate it against its competitors when financial statements are created in a common size.
What is the common size percentage?
The formula known as "common-size percentages" sets each line item as a percent of one standard amount and is used to analyze both the income statement and the balance sheet. You would put each additional asset and liability line item on the balance sheet as a percentage of total assets.
Given,
Cash = $29,000
Total Assets = $471,000
Cash Common-size percent =?
Required to calculate= Cash Common-size percent = Cash divided by Total assets multiplied by 100.
Cash Common-size percent = 29,000 x 100/471,000 =6.16% (Approx).
Thus, Instead of showing entries as absolute numerical values, a common-size financial statement presents entries as a percentage of a common base figure. Common size statements enable analysts to make apples-to-apples comparisons between businesses of various sizes, across industries, or through time. The common-size percent for cash equals 6.16%.
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