• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Chapter 6. Statement Analysis > Common-Sizing for Variance Analysis

Common-Sizing for Variance Analysis

The term variance analysis, in the context of finance and accounting, means the examination of differences between one set of numbers and another. For example, if your company's actual total salaries during the first quarter differ from its budgeted first quarter salaries, there is a variance between the budget and the actual results.

Common-sizing can help you do variance analysis more quickly and easily. Speed and facility in variance analysis are particularly important, because companies spend an enormous amount of time and effort examining the differences between their plans and their actual results and between prior and current results. Consider the following case study on New Way Tours, a travel agency.


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint