What information does a common size balance sheet provide?

A common size balance sheet presents each line item as a percentage of total assets, allowing for an easy comparison of the relative size of different asset categories, liabilities, and shareholders' equity within a single year. This method facilitates the analysis of how much each individual component constitutes of the overall financial position of the company.

By representing everything on a proportional basis, it allows stakeholders to assess the balance sheet's structure and the company's financial health without being influenced by absolute dollar amounts, which can vary significantly between companies or due to changes in total assets. This context is especially useful when comparing companies of different sizes or analyzing changes over time.

The other options do not accurately reflect what a common size balance sheet illustrates. While comparing amounts to total liabilities or revenues is important for financial analysis, those comparisons pertain to specific line items and do not represent the focus of a common size balance sheet. A summary of net income pertains to the income statement and is unrelated to the structure and analysis presented by a common size balance sheet.