What is a statement of normal size?

common size statement is a financial document that is often used as a quick and easy reference to the finances of corporation or business. Unlike the balance sheets and other financial statements, it does not reflect the normal size command for each line item. Instead, the common size command structure uses a common base number and assigns a percentage of this number of each line item or category reflecting in the document.

The company may decide to use the financial statements of this type to present a quick picture of how many collected or generated incomes are directed to each operating function within the organization. Using a normal size statement can enable quickly to identify areas that can use more operating capital than practical at the time, and allow budget changes to repair the situation.

Common size command can also be a useful tool comparedh a company. Using a percentage in common size commands eliminates the problem that the company generates more income, and brings focus on how income is used in each of the two businesses. Using a common size statement in this way can often help identify areas where each company uses resources effectively, as well as areas where there is room for improvement.

common size statement can be prepared for any required check period. Companies that decide to take advantage of the financial statements of this type may decide to use this format for quarterly, half -year or annual reviews. If there are concerns about operating costs, a common size statement can be prepared more often, such as monthly. Since a statement of common size is very easy to read and no need to contain information that would be considered proprietary, the format can often be afteruse as part of the general information that is published.