Common Size Balance Sheet Format

Common-size balance sheet format is prepared with 4 columns starting from Particulars, Note No., Amount, and Percentage. A statement that shows the percentage relation of each asset/liability to the total assets/total of equity and liabilities, is known as a Common-size Balance Sheet. To express the amounts as the percentage of the total, the total assets or total equity and liabilities are taken as 100. With the help of a Comparative Common-size Balance Sheet of different periods, one can highlight the trends in different items. If a Common-size Balance Sheet is prepared for the industry, it facilitates the assessment of the relative financial soundness and helps in understanding the financial strategy of the organisation.

Format of Common Size Balance Sheet

Note: The Common-size Balance Sheet does not include line items of the Balance Sheet, the accounting treatment of which are not to be evaluated.

A Common-size Balance Sheet has the following six columns:

1. First Column: In the first column, the items of the Balance Sheet are written.

2. Second Column: In the second column, Note No. given against the line item is written.

3. Third Column: In the third column, the amounts of different items; i.e., assets, equity, and liabilities of the previous year are written.

4. Fourth Column: In the fourth column, the amounts of different items; i.e., assets, equity, and liabilities of the current year are written.

5. Fifth Column: In the fifth column, the percentage relation of the different items of the previous year’s Balance Sheet to the Total of Equity and Liabilities/Total Assets are written. Here, the Total of Equity and Liabilities/Total Assets are taken as 100. 

6. Sixth Column: In the last column, the percentage relation of the different items of the current year’s Balance Sheet to the Total of Equity and Liabilities/Total Assets are written. Here, the Total of Equity and Liabilities/Total Assets are taken as 100.