A common size income statement template excel is a financial statement that shows a company’s revenues and expenses as a percentage of total sales. This makes it easy to compare a company’s financial performance over time, as well as to compare it to other companies in the same industry. Common size income statements are often used by investors and analysts to evaluate a company’s financial health and performance.
To create a common size income statement, you simply divide each line item on the income statement by total sales. For example, if a company had $100,000 in sales and $10,000 in cost of goods sold, the cost of goods sold would be reported as 10% on the common size income statement.
Common size income statements can be very useful for comparing companies of different sizes. For example, a small company with $1 million in sales may have a higher gross profit margin than a large company with $100 million in sales. However, the common size income statement would show that both companies have the same gross profit margin as a percentage of sales.
Benefits of Using a Common Size Income Statement Template Excel
There are many benefits to using a common size income statement template excel. Some of the benefits include:
Easy to Compare Financial Performance Over Time: Common size income statements make it easy to compare a company’s financial performance over time. This is because all of the line items are expressed as a percentage of total sales. This makes it easy to see how a company’s revenues, expenses, and profits have changed over time.
Easy to Compare Companies: Common size income statements also make it easy to compare companies of different sizes. This is because all of the line items are expressed as a percentage of total sales. This makes it easy to see how a company’s financial performance compares to other companies in the same industry.
Identify Trends: Common size income statements can also be used to identify trends in a company’s financial performance. For example, a company may see a trend of increasing gross profit margins or decreasing operating expenses. This information can be used to make informed decisions about the company’s future.
How to Create a Common Size Income Statement Template Excel
Creating a common size income statement template excel is easy. Simply follow these steps:
1. Open a new Excel workbook.
2. Enter the company’s income statement data into the workbook.
3. Calculate the total sales for the period.
4. Divide each line item on the income statement by total sales.
5. Format the income statement as a percentage.
6. Save the workbook.
Conclusion
Common size income statement template excel is a valuable tool for investors and analysts. They can be used to compare a company’s financial performance over time, as well as to compare it to other companies in the same industry. Common size income statements can also be used to identify trends in a company’s financial performance.
If you are looking for a way to improve your financial analysis, I encourage you to start using common size income statements. They are a simple and effective way to gain a better understanding of a company’s financial health and performance.
