The restatement of financial statement items using a common denominator. In most cases, the items are expressed as a percentage of the revenue. This allows the analyst to identify trends and major differences.
See also: Cross-Sectional Analysis, Time-Series Analysis, Horizontal common-size statement
Many years ago, I was exactly where you are today—a CFA Level I candidate juggling a demanding full-time career with the daunting CFA curriculum. Coming from a Computer Engineering background, finance was entirely new territory for me. And yes, it was tough!
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Keith Tan, CFA
Founder & Chief Instructor, PrepNuggets
