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    doriam's Avatar
    doriam Posts: 1, Reputation: 1
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    Oct 24, 2007, 10:47 PM
    Preparing common size income statements
    How do you prepare common size income statements?
    Dawn23's Avatar
    Dawn23 Posts: 5, Reputation: 1
    New Member

    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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