What are the uses of common size statements?

Use of common size statement:

1. Common size analysis reveals the sources of capital and all other sources of funds and the distribution or use or application of the total funds in the assets of a business enterprise.
2. Comparison of common size statements over a number of years will clearly indicate the changing proportions of the various components of assets, liabilities, costs, net sales and profits.
3. Comparison of common size statements of 2 or more enterprises in the same industry or that of an enterprise with the industry as a whole will assist corporate evaluation and ranking.