Regularly reviewing your financial statements is essential to the health of your business. Doing so can help you identify trends that could signify problems in your business so you can address them before they become insurmountable. Beyond identifying problems, though, regular financial statement analysis also helps you identify opportunities for growth and profitability improvements. Common size analysis is just one of these crucial methods.
What is common size analysis?
Common size analysis displays each line item of your financial statement as a percentage of a base figure.