Common-size financial statements present financial information in terms of percentages instead of dollar values. On a common-size statement, each line item is expressed as a percentage of a reference ...

Company management often analyzes financial statement data to understand how the business is performing relative to where it was historically, and relative to where it wants to go in the future.

Calculating profit as a percentage of revenue shows relative profitability, like Apple's 30.5% vs Fitbit's 20.5%. Common size income statements allow comparisons across companies and time by ...