Comparative Income Statements

Comparative Income Statements

Common Size Income Statements

  • Common size income statements allow accountants and other financial personnel to compare companies of different sizes
  • CSIS show percentages for each expense and net income/loss as a percentage of total revenue
  • This also allows for members of the organization to make critical decisions about the businesses success and failures
  • When the dollar values are shown as percentages, it is easier to identify areas of strength and weakness and where the company could improve
  • The total revenue dollar amount is always the 100% amount on the CSIS
  • From there, all other dollar values are a percentage of total revenue
  • To calculate percentages, take the dollar figure (bank expense, rent, etc) divide it by the total revenue figure, and then multiply the amount by 100
  • In excel, just do the division and then select the percent sign from the toolbar and it will automatically change the value to a percent for you
  • If you have multiple revenues, than each revenue should be a percentage of total revenue
  • The two or more revenue amounts should add to 100%
  • Each expense and the net income/loss figure will also be a percentage of total revenue and the individual percentages should add to 100%

Comparative Income Statements

  • Allows a company to compare dollar figures over two year period
  • For the dollar increase/decrease, take the second year, and subtract the first
  • To calculate the % change, take the dollar increase/decrease value, divide it by the first year, and multiply by 100
  • Remember, in excel, you just have to do the dividing and then press the percentage sign

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Topics 1) What is Accounting? 2) Financial Position 3) Balance Sheet 4) GAAP 5) Equation Analysis Sheet 6) Analyzing a Transaction 7) Ledger Account 8) Trial Balance 9) Expanded Ledger 10) Income Statement 11) New GAAP 12) Report Form Balance Sheet 13) The Journal 14) Source Documents 15) GAAP for Journal 16) Sales Tax 17) Posting 18) Comparative Income Statement 19) Classified Balance Sheet 20) Adjustments 21) Closing Procedures 22) Depreciation 23) Merchandise Business
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