Common Size Financial Statements: Appendix B [WLO: 4] [CLO: 2]
In your first assignment this week you retrieved the financial information for your chosen company. Analysts must evaluate a companys financial statements to understand its performance over time. Common size statements allow analysts to compare the relative composition of the companys accounts over time (Hickman et al., 2013, Section 11.3, para. 5). For this assignment, you will take the formatted financial statements you retrieved using Mergent and construct common size income statements and common size balance sheets for your chosen company. The video below explains how to construct a common size income statement and balance sheet using Excel.
Title this assignment Appendix B. Be sure to save both formats (Excel and PDF) of these files for later use.
Prepare:
Prior to beginning work on this assignment,
- Review Chapter 2 and Chapter 11: Section 11.3 in
e. - Complete the , Historical Financial Statements: Appendix A
- You will be using the Excel file from Mergent for this assignment
- Watch the following video that will go over how to create and format Appendix B:
Construct Appendix B:
Using the formatted income statement and balance sheet in Excel from Week 1 – Assignment 1, and following the instructions in the video,
- Calculate and format the common size income statement for the three years.
- Calculate and format the common size balance sheet for three years.
- Save this Excel file as a PDF and title it Appendix B.
