Common Sized Financials

Posted on March 17, 2014

Taking your balance sheet and income statements for the past four years (or for any past set of periods) and putting them in common size format is a fast track to analyzing changes in your financial conditions.  There is just no way you can look at standard financial statements and see the same thing as quickly.

The common size format is useful for updating your valuation (if earnings based).  Commercial bankers do this to your financials first thing (they call it a spread), so you might as well do it first.

Download the attached spreadsheet and you’ll figure out what to do pretty quickly.