Common Size Analysis

The video tutorial explains how to analyze a company's financial performance using common size analysis. It introduces the concept of evaluating performance metrics as a percentage of a larger base, allowing for comparison across different companies or time periods. The tutorial covers two types of common size analysis: horizontal, which compares elements within the same time period, and vertical, which compares across different time periods. Examples are provided to illustrate how these analyses are applied in balance sheets and income statements, emphasizing the importance of using percentages to ensure comparability.

Provide an example of how common size analysis can be applied to a balance sheet.

What types of metrics are typically used in income statements for common size analysis?