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

Question

Quizplus · Accepted Answer

Common-size financial statements are a type of vertical analysis, where each line item on the financial statement is expressed as a percentage of a key item such as total assets, total liabilities or net sales. This approach helps in understanding the proportional contribution of each item to the overall financial performance of the company.

Common-Size Financial Statements Represent a Form Of