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A common size balance sheet expresses each balance as a percentage of total assets. Build a comparison from two statement exports, check the totals, and distinguish changes in composition from dollar growth.
A common size balance sheet divides each asset, liability, and equity line by total assets at the same date. It shows how the company holds its assets and finances them, without letting differences in company size dominate the comparison. Keep the dollar statement alongside it: a smaller percentage does not necessarily mean a smaller balance.
Common-size percentage = Balance-sheet line / Total assets at the same date × 100
The SEC's guide to financial statements explains the underlying identity: assets equal liabilities plus shareholders' equity. Therefore, total assets and total liabilities plus equity provide the same denominator when the statement balances.
This is vertical analysis. OpenStax's financial statement analysis appendix describes expressing statement lines against a base amount to compare businesses of different sizes. The common-size statement glossary covers the broader method; the denominator here is assets, rather than the revenue base used for an income statement.
The question is composition: how much of the business's reported resources sits in inventory, receivables, cash, or equipment? On the financing side, how much is supported by supplier balances, borrowing, or equity?
Bring one balance-sheet export for each comparison date. Keep account codes, account names, reporting dates, balances, currency, and the approved reporting categories. Use final adjusted balances with the same entity scope and accounting basis.
Map equivalent accounts to the same lines before dividing. A customer receivable should not appear under trade receivables in one export and other assets in the next. Preserve contra-account signs when deriving net balances, such as equipment after accumulated depreciation.
If the source file includes both detailed accounts and subtotals, choose one level for each calculation. Adding inventory accounts and the inventory subtotal counts the balance twice. The separate balance sheet guide explains the statement structure if the export first needs organizing.
A US distributor compares December 31, 2025, with December 31, 2026. Place the following lines in spreadsheet rows 2 through 11, with labels in A, prior balances in B, and current balances in C. The example has no other accounts.
| Row | Line | Prior balance (USD) | Current balance (USD) | Prior share | Current share | Change, percentage points |
|---|---|---|---|---|---|---|
| 2 | Cash | 120,000 | 90,000 | 10.0% | 6.0% | -4.0 |
| 3 | Receivables | 240,000 | 330,000 | 20.0% | 22.0% | 2.0 |
| 4 | Inventory | 360,000 | 480,000 | 30.0% | 32.0% | 2.0 |
| 5 | Net equipment | 480,000 | 600,000 | 40.0% | 40.0% | 0.0 |
| 6 | Total assets | 1,200,000 | 1,500,000 | 100.0% | 100.0% | 0.0 |
| 7 | Accounts payable | 210,000 | 285,000 | 17.5% | 19.0% | 1.5 |
| 8 | Current borrowing | 90,000 | 165,000 | 7.5% | 11.0% | 3.5 |
| 9 | Long-term debt | 300,000 | 375,000 | 25.0% | 25.0% | 0.0 |
| 10 | Equity | 600,000 | 675,000 | 50.0% | 45.0% | -5.0 |
| 11 | Liabilities plus equity | 1,200,000 | 1,500,000 | 100.0% | 100.0% | 0.0 |
In B6 enter =SUM(B2:B5) and copy across to C6. In B11 enter =SUM(B7:B10) and copy across to C11.
Use D for prior shares and E for current shares. Enter these formulas in D2 and E2, then fill down through row 11:
=B2/$B$6
=C2/$C$6
Format D and E as percentages with one decimal place. The absolute references keep each date's denominator fixed while the numerator follows the row. Do not multiply these formulas by 100 when also applying percentage formatting.
In F2, calculate the percentage-point movement and fill down:
=(E2-D2)*100
Format F as a number with one decimal place. Receivables move from 20.0% to 22.0%, an increase of 2.0 percentage points. This is a difference between shares, not a growth rate for the receivables balance.
Run the dollar checks first:
=B6-B11
=C6-C11
Both must return zero. Then check each side separately:
=SUM(D2:D5)
=SUM(D7:D10)
=SUM(E2:E5)
=SUM(E7:E10)
Each result is 100.0%. Never sum every displayed percentage: assets and their financing are separate sides, and the table also contains totals. Use underlying unrounded formulas for these checks; rounded displayed shares can create a small apparent difference on other datasets.
Cash falls from $120,000 to $90,000 while total assets rise from $1,200,000 to $1,500,000. Its share contracts from 10.0% to 6.0%. Inventory and receivables take larger shares, so the useful follow-up is whether collection and inventory conversion are keeping pace with the business.
Equity increases from $600,000 to $675,000, yet its share falls from 50.0% to 45.0%. The company has more equity dollars and a smaller equity share at the same time. Current borrowing takes a larger share of financing, which warrants a review of maturity dates and repayment capacity.
Use working capital for the operating funding calculation and flux analysis to reconcile the movements to their underlying causes. Common sizing identifies the shift; it does not establish why it happened.
Bring your balance-sheet exports and the account mapping that makes their categories comparable. Covirage maps the columns, and its tools compute and check the balances and shares; the external AI model explains the changes with every figure traced to its rows. Create a free Covirage account and bring a sample of your own data.
See Covirage for finance teams for the wider reporting context.
Use total assets for the same company and reporting date as the line being measured. Because assets equal liabilities plus equity, that same denominator works for both sides. Do not divide liabilities by total liabilities alone.
Yes. A balance can grow more slowly than total assets, leaving it with a smaller share of the statement. Keep the dollar balances beside the percentages so readers can distinguish a change in composition from an actual reduction.
Common sizing measures a balance against total assets at one date. Horizontal analysis measures a balance against its own value in an earlier period. Use the first for composition and the second for dollar movements and growth rates.