In the Statement of Profit amp Loss of a Common Size Statement ........

General Accounting Principles Financial statement analysis

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In the Statement of Profit & Loss of a Common Size Statement :

Figure of net revenue from operations is assumed to be equal to 100

Figure of gross profit is assumed to be equal to 100

Figure of net profit is assumed to be equal to 100

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Explanation:

The common-size statements, balance sheet and income statement are shown in analytical percentages. The figures are shown as percentages of total assets, total liabilities and total sales. The total assets are taken as 100 and different assets are expressed as a percentage of the total. Similarly, various liabilities are taken as a part of total liabilities.

These statements are also known as component percentage or 100 per cent statements because every individual item is stated as a percentage of the total 100.