The Common Size Balance Sheet of QuickBooks’ Business Plan Workbook

By Stephen L. Nelson

The Common Size Balance Sheet schedule lists — in the balance sheet format — what percentage of the total assets each individual asset represents and what percentage of the total liabilities and owner’s equity each individual liability and the owner’s equity represents. When you compare these percentages with those of business peers, you can see the relative financial strength or weakness of your business.

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Trends in the percentages over time can indicate improvement or deterioration in the overall financial condition of your business.

The Common Size Balance Sheet schedule has 19 rows with calculated data that express line-item amounts as percentages of the total. For the asset side of the Balance Sheet, assets are expressed as a percentage of the total assets. For the creditor and owner’s equity side of the Balance Sheet, equities are expressed as a percentage of the total liabilities and owner’s equity.

The formulas for all rows except Total Assets and Total Liabilities and Owner Equity simply convert the Balance Sheet values to percentages. For example, the Cash & Equivalents formula for the starting period is

=B43/B$52

The formula for the first period is

=C43/C$52

and so on. All asset percentages are derived from dividing by Total Assets, which explains why the absolute reference to row $52 is used in all asset formulas. Similarly, the absolute reference to row $66 appears in all formulas in the liabilities and equity formulas.

The formula for the Total Assets percentage at any time is the sum of the Current Assets percentage; the Net Plant, Property & Equipment percentage; and the Other Noncurrent Assets percentage. The result always equals 100 percent.

Similarly, the formula for the Total Liabilities and Owner Equity percentage at any time is the sum of the Current Liabilities, the Noncurrent Liabilities, and Owner Equity percentages. The result is always 100 percent.