Which of the following descriptions best describes common-size analysis?
A)converting dollar values on the financial statements to percentages of a specific base amount
B)comparing data from one company to with those of another company over the same period
C)examining company information from multiple periods
D)using historical information as a basis for predicting future outcomes

Question

Quizplus · Accepted Answer

Common-size analysis involves expressing financial statement line items as percentages of a common base, such as total assets or total revenue. This allows for easy comparison of financial statement data across companies of different sizes or within the same company over time.

Which of the Following Descriptions Best Describes Common-Size Analysis