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efinancemanagement.com
Vertical Analysis – Meaning, Common-size Financial Statements, Benefits, Drawbacks and More
Common Size Financial Statements expresses every item of financial statement in terms of a percentage of one convenient base parameter. The base item for common size balance sheet is taken as the total assets (for assets side) and total liabilities (for liabilities side), while for common size (Profit and Loss Statement) income and expenditure statement; the base parameter is taken as sales or revenue.
