Common-size financial statements represent a form of:
A)trend analysis.
B)horizontal analysis.
C)vertical analysis.
D)ratio analysis.

Question

Quizplus · Accepted Answer

Common-size financial statements involve converting all line items on the financial statement to a percentage of a selected base item, such as total assets or revenues. This form of analysis is known as vertical analysis as it compares items on a financial statement to a common base. It allows for easy comparison of different companies or different periods and can provide insights into the company's financial position and performance.

Common-Size Financial Statements Represent a Form Of