Common-Size Statement Analysis for ABC Corp

Common-size financial statements are powerful tools in financial analysis, allowing analysts to evaluate a company’s financial performance relative to a standard baseline. By converting each line item to a percentage of a common figure, such as total revenue or total assets, analysts can easily compare a company’s financial position with its peers.

Consider a company, ABC Corp, which reported revenue of $5,000,000, cost of goods sold at $3,000,000, and total assets of $10,000,000 for the year. If an analyst prepares a common-size income statement for ABC Corp, what percentage will the cost of goods sold represent?