Common-size financial statements make the process of comparing firms in an industry relatively more simple. This process takes an item in the financial statement and shows it as a percentage relative to a base figure which can uncover trends that are not readily recognized. To common size the balance sheet, one could take the total assets, or liabilities and shareholder's equity as the common figure for use as they are equal in the accounting equation. Then one could understand if excess cash is being retained on the balance sheet, inventories are growing too high, or whether the debt level is too high (Young, S. D., et al., 2019). For The Coca Cola Company, total assets for 2021 and 2020 at $94,354 and $87,296 respectively, which make up 100% of each year's base figure. Looking at their long-term dept, for 2021 and 2020 the common-size figures sow 40.1% and 46% respectively for an average of 43% for the two years. This figure can be considered to be over a reasonable amount, however looking at PepsiCo, their average for the same figure and fiscal years is 41.2% which is closely related. For total cash and cash equivalents of 2021 and 2020 with Coca Cola Company, the figures show an average of 9% versus 7.5% for the same in PepsiCo. Overall, this method represents a simplified approach for analyzing the financial well being of a company in its industry.