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Common-Size Income Statement CalculatorVertical Analysis for Two Periods

What do these figures come to once the work is shown?

Each income statement line as a percent of revenue for two periods, with the change in percentage points.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Gross margin, current
39.00%
Share of revenue left after cost of sales
Gross margin, prior
42.00%
Gross margin change in points
-3.00
Drawn to one scale
Net income, current$1,164,000
Net income, prior$1,215,000
All results
MeasureResult
Gross margin, current39.00%
Gross margin, prior42.00%
Gross margin change in points-3.00
Cost of sales, current percent of revenue61.00%
Cost of sales, prior percent of revenue58.00%
Operating expenses, current percent of revenue24.00%
Operating expenses, prior percent of revenue25.00%
Operating expenses change in points-1.00
Interest and other, current percent of revenue2.00%
Interest and other, prior percent of revenue2.00%
Income tax, current percent of revenue3.30%
Income tax, prior percent of revenue3.43%
Net margin, current9.70%
Net margin, prior11.57%
Net margin change in points-1.87
Net income, current$1,164,000
Net income, prior$1,215,000
How this was worked out
Work shownrecomputed as you type
Each line / revenue x 100
Gross margin = (revenue - cost of sales) / revenue
Net income = revenue - cost of sales - operating expenses - interest and other - tax

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Each line / revenue x 100
  • Gross margin = (revenue - cost of sales) / revenue
  • Net income = revenue - cost of sales - operating expenses - interest and other - tax

How it works

A common-size statement divides every line by revenue, which removes the effect of growth and lets you compare periods and peers. This is vertical analysis. A drop in gross margin with steady operating expenses points to pricing or cost of sales issues.

In audit planning, a line whose share of revenue moves without an explanation, such as a rise in cost of sales share or a fall in the tax share of revenue, is a lead for inquiry. Always compare the movement to what management and operating data say.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Why use revenue as the base?

It is the standard base for an income statement. Balance sheets use total assets.

Are points the same as percent change?

No. Points are the arithmetic difference between two percentages.

Can I add more lines?

Combine lines into the five shown, or use a spreadsheet for a full statement.

Formulas on this page are the standard definitions.

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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