Common-size analysis is a powerful tool for financial analysis and decision-making. Common-size analysis is a form of ratio or metric analysis that states financial statement amounts as percentages of a base amount.
Common-size analysis is useful for comparing the financial performance and position of different companies, especially those of different sizes. It also helps to identify trends and patterns over time within a company and across entities. This is very useful for business environmental analysis, peer benchmarking, and building financial projections.
You may already do some forms of common-size analysis, but may not know all the ways it can provide insights and improve projections.
You learn in this course:
- How to build common-size financial statements
- Ways to perform common-size financial analysis
- Sources for common-size financial statements
- How to build fast and easy financial projections with common-size analysis
You'll see examples of analysis and methods I've used in my career, as well as ideas on other ways you may be able to use common-size analysis.
Course Key Concepts: Common-size analysis, Common-size financial analysis, Metric analysis, Ratio analysis, Peer analysis, Benchmarking, Industry analysis, Financial projections.
Note: This course is also available in Text based format. https://www.illumeo.com/courses/common-size-financial-analysis-text-based-course
Learning Objectives
- Identify the two types of common-size analysis.
- Explore and recall the formulas for common-size analysis.
- Discover and recall how to build projections with common-size analysis.
Prerequisites
No advanced preparation or prerequisites are required for this course.