How to Create a Common Size Balance Sheet

When analyzing financial statements, the simplest form of data is the easiest conveyed. The common size balance sheet is a simple view of a balance that allows for easy comparison with competitors because this type of balance sheet uses percentages to convey a company's financial standing. You can transform a standard balance sheet into a common size balance sheet in Microsoft Excel.

Things You'll Need

• MS Excel 2007

Instructions

1. Open MS Excel. Open the workbook containing your balance sheet.

2. 

   Write down the figure of your balance total (this is the number that is in your total assets and total liabilities cells) on a sheet of paper.

3. Write down each item and the corresponding figure next to it on the same sheet of paper.

4. Replace the first item on the spread with the following calculation:
   = (previous figure / balance total)
   Press "Enter" to finish the equation.

5. Click the cell you just entered your equation in and select the percent icon from the "Home" tab in "Number" section of the toolbar. Your calculation should now be a percentage.

6. Repeat Steps 4 and 5 for the remaining items on the balance sheet.

7. In the Total Assets cell, add together the percentages in the Assets column. The total should equal 100 percent.

8. Repeat Step 7 for the Total Liabilities cell.

9. Save the new workbook as "Common Size Balance Sheet."

Tips & Warnings

• You do not have to create the common size balance sheet in Excel. All that is needed is to divide each item in the balance sheet by the total balance to get the percentages.

Resources

• Financial accounting ratios and analysis