Which of the following statements about a common-size balance sheet is true?
A) Each item on a common-size balance sheet is expressed as a percentage of sales.
B) The common-size balance sheet reveals the composition of expenses relative to revenues.
C) The common-size balance sheet reveals the capital and debt structure of the firm.
D) Each item on a common-size balance sheet is expressed as a percentage of net income.

Question

Quizplus · Accepted Answer

The common-size balance sheet presents each item as a percentage of total assets, revealing the capital and debt structure of the firm by showing how much of the firm's assets are financed through debt and how much through equity.

Which of the Following Statements About a Common-Size Balance Sheet