Common-size statement can be prepared with three columns. Following are the steps to be followed in preparation of common-size statement:
(i) Column 1: In this column, particulars of items of income statement or balance sheet are written.
(ii) Column 2: Enter absolute amount.
(iii) Column 3: Choose a common base as 100. For example, revenue from operations can be taken as the base for income statement and total of balance sheet can be taken as the base for balance sheet. Work out the percentage for all the items of column 2 in terms of the common base and enter them in column 3.
Format of common-size statement:

(i) Give only interim reports:
Financial statements are prepared at the end of every accounting period. But the actual position of the business can be known only when the business is closed.
(ii) LImited access to external users:
The external users do not have detailed and frequent information of financial results as they have limited access
(iii) Influenced by personal judgement:
Preparation of financial statements may be influenced by personal judgements and therefore these are not free from bias.

The nature of financial statement is historical. Past cannot be the index of future and cannot be cent percent basisi for future estimation forecasting budgeting and planning.