# Integral Percent Procedure

Procedure for hundreds of integrals . It is to express in percentage figures of a State Financial. A Balance in percent integral indicates the proportion in which the total resources of the company are invested in each type or class of asset , as well as the proportion in which they are financed by the creditors or by the shareholders of the same.

The Income Statement shows the percentage of participation of the various items of costs and expenses, as well as the percentage that represents the profit obtained in relation to total sales .

This method consists of separating the content of the Financial Statements on the same date corresponding to the same period into its elements or constituent parts in order to determine the proportion that each of them keeps in relation to a whole. This procedure can be found as a common percent procedure or a procedure to reduce by hundreds

## Summary

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• 1 Features
• 2 Application
• 4 Applicable forms
• 5 Sources

## features

Unlike the simple ratio method, the integral percentage method has very special characteristics. It is not possible to draw conclusions about the financial situation of the company only with the integral percentages (that is, it is an alternative method). These must be compared with those of other companies within the same industry , in order to interpret them. For this reason , it is necessary to take special care in determining which company you are going to compare them to, since if the other company is also bad in its financial situation, then it will be useless to work with this information. To measure management performanceIt is not recommended to carry out an analysis based on the comparison of financial statements of 2 or 3 years, since there are changes in the distribution of the company’s resources and debts, which are evidently justified by the development of your business. Also, you can make comparisons with the Financial Statements that you have budgeted to detect deficiencies in the operation or administration of the company. The integral percentages method is an alternative and is considered as a type of vertical analysis

## Application

This method is applied in those cases in which it is desired to know the magnitude or importance of the parts that make up a whole. It is to determine the magnitude that make up each of the lines that make up, for example, Current Assets in relation to their total amount. Its application can focus on dynamic or static, basic or secondary financial statements such as:

• Statement of Financial Position / Balance Sheet
• Income / Loss and Profit Statement]]
• Cost of Sales Status
• Production Cost Status
• Manufacturing Expense Analytical Status
• Sales Expense Analytical Status, etc.

This procedure facilitates the comparison of the figures with which we can determine a probable abnormality or defect of the company subject to analysis.

The integral percent method applied to the Balance Sheet:

1. Assign 100% to total assets.
2. It also assigns 100% to the sum of the liabilities and Stockholders’ Equity .
3. It considers that each one of the assets, liabilities and capital items must represent a fraction of the totals.

The defect is that since we are talking about percentages, it is easy to reach the wrong conclusions, especially if you want to establish comparative percentages.

This method is useful for drawing conclusions in isolation, exercise by exercise, but it is not advisable if you want to make interpretations when comparing various exercises.

This method can be used totally or partially.

Total percent integral:

Here the amounts that equal 100% are:

In the first statement the total assets and the sum of the liabilities plus the stockholders’ equity, being able to later determine the percentages of each chapter of the statement of financial position, as well as the partial percentages of each of the items. In the income statement, 100% corresponds to net sales.

Percent partial integrals:

In the study of current assets by integral percentages of current assets values, the total value of this item is taken as equal to 100% and on this basis, each of the partial values ​​of each of its concepts is calculated.

Cumulative percent of current assets in relation to current liabilities Here we have in mind the discovery of the true ability to pay for trading more completely and truthfully than the simple ratio of current assets.

In this case, the current liabilities are taken equal to 100 and then the percentage that each of the values ​​of the current assets represents in relation to said 100% is calculated, with the circumstance that said percentages are accumulating.

In this way, and because the different concepts of current assets are arranged according to their availability, this method takes into account the solvency and liquidity of its current securities.

The results obtained are expressed in percentages, finding here the advantage and the disadvantage of the method.

The advantage is that when working with relative numbers we forget the absolute magnitude of the figures of a company and with this the importance of each concept within the set of values ​​of a company is more easily understood.

The defect is that since we are talking about percentages, it is easy to reach the wrong conclusions, especially if you want to establish comparative percentages.

This method is useful for drawing conclusions in isolation, exercise by exercise, but it is not advisable if you want to make interpretations when comparing various exercises.

This method can be used totally or partially.

Any formula can be applied interchangeably to a certain type of financial statement.

## Applicable formulas

• Integral percent = (partial number / base figure) 100
• Integral percent equals partial figure over base figure per hundred
• Constant factor = (100 / base figure) each partial figure
• Constant factor equals one hundred over base figure for each partial figure

The Comprehensive Percents Procedure is applied to analyze a financial statement at a fixed date or corresponding to a given year. Once analyzed, it should be compared to be able to make basic judgments and:

• Know the true situation of the company.
• Discover diseases of the Cía.
• Make sound decisions, etc.