From the course: Corporate Financial Statement Analysis

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Excel: Construct and use common-size financial statements

Excel: Construct and use common-size financial statements

From the course: Corporate Financial Statement Analysis

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Excel: Construct and use common-size financial statements

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In the Common Size Excel workbook, the first tab is titled Case A. So make sure you're in the Case A sheet right here. Here we have balance sheet and income statement data for Thatcher Company and Benchmark Company, two hypothetical companies. We're going to see how easy it is to use Excel to construct and use Common Size financial statements. Now in this hypothetical example, these two companies are in the same industry. Benchmark company is recognized as the company in the industry that's doing things right from an operational standpoint. Now, yes, Benchmark is a little smaller. What makes me say that? Well, Benchmark has $600,000 in sales. Thatcher has 900,000. Benchmark's a little smaller with lower assets and lower sales, but Benchmark's business practices are still the ones that everyone else in the industry wants to emulate. So what can we tell about Thatcher Company just by, in comparison to benchmark company, just by looking at these raw financial statement numbers. Well, not…

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