doriam Posts: 1, Reputation: 1 New Member #1 Oct 24, 2007, 10:47 PM
Preparing common size income statements
How do you prepare common size income statements?
 Dawn23 Posts: 5, Reputation: 1 New Member #2 Oct 25, 2007, 07:49 AM
To prepare a common size income statement, is to turn value into percentages with a common demonitor. Item/reference item. In an income statement the reference item is the sales, revenue... and it is always 100% because 1/1=100% Then go down through each item on income statement and turn into %. Ex: Cost of Goods sold: 120,000
sales: 1,000,000= 120,000/1,000,000=12% so cost of goods sold is 12% of sales. If you are comparing 2 years, do the same for each year, and put next to on income statement to show comparison.
2000 2001
sales 100% 100%
CGS 12% 15%
hope this helps;)

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