Financial Analysis and Control / 97

items, with 1998 used as the base year for Joseph and Julie Farmer. The calcula-_,
tion of an index for a specific year is:

Value in specific year

___________________ x 100
Value in base year

For example, the valuation/personal asset equity values are $65,602' for 1998
and $46,138 for 2001 (Table A4.1). The index for 2001 is: -

$46
x 100 = 70
, 138

$65,602

Thus, the valuation/ personal asset equity balance in 2001 is only 70 percent of
the same account in 1998. In contrast, the amount of contributed capital and re -
tained earnings is projected to be 115 in 2001; and the total owner equity is esti -
mated to be 109 in 2001.

Table 4.2. Index-Number Trend Series for Joseph and Julie Farmer

1995 1999 2000 2001

Assets -

Current assets .............................................................. 100 89 95 83

Noncurrent assets ............................................... 100 101- 99 98

Total Assets 100 ---- - 98_ 98 95

Liabilities

Current liabilities .......................................... 100 95 84 50

Noncurrent liabilities ........................................ 100 100 98 97

Total Liabilities 100 98 92 76

Owner Equity

Contributed capital and retained earnings .. 100 97 105 115

Valuation/personal asset equity ........................... 100 104 83 70

Total Owner Equity 100 98 102 109

Common-Size Financial Statements

Common-size financial statements represent each item on a financial

statement relative to a total value for a category of similar items. Thus, the ap -