Common Size Balance Sheet - Formula, Calculations (Step by Step)

Common Size Balance Sheet Chapters 00:00 Introduction 01:00 What is Common Size Balance Sheet 02:00 What is Common Size Balance Sheet 03:52 Common Size Balance Sheet Formula 04:32 Colgate's Case Study - Common Size Balance Sheet Analysis In this video, we discuss about Common Size Balance Sheets, how to prepare them and why they are so important.  What is a Common Size Balance Sheet? Common Size Balance Sheet refers to percentage analysis of balance sheet items on the basis of the common figure as each item is presented as a percentage that is easy to compare.  Formula for Common Size Balance Sheet = (Line Item / Total Assets)*100 Uses of Common Size Balance Sheets: 1. Helps in building trend lines to discover the patterns over a specific period of time 2. Helps understand the ratio and percentage of each line item clearly 3. Variations that occurred during expenses are reflected 4. Aids in comparison of income statements for two or more periods         Limitations of Common Size Balance Sheet: 1. The reason behind the reduction of cash and cash equivalents remains unclear 2. Inconsistencies in data of different years unaccounted for 3. Window dressing of financial statements 4. Fails to identify qualitative elements of a company’s performance 5. Doesn’t measure the solvency or liquidity of a company #commonsizebalancesheet, #wallstreetmojo, #commonsizebalancesheetformula  For more details, you can refer to our article at - https://www.wallstreetmojo.com/common... Subscribe to Our Channel - Youtube ►    / @wallstreetmojo   LinkedIn ►   / mycompany   Facebook ►   / wallstreetmojo   Instagram ►   / wallstreetmojoofficial   Twitter ►   / wallstreetmojo