The analysis technique that shows each item on the financial statements as a percentage of one item on that statement is known as:
A) trend analysis.
B) comparative financial statements.
C) common size financial statements.
D) working capital schedule.

Question

Quizplus · Accepted Answer

Common size financial statements express each item as a percentage of a chosen base item, allowing for easy comparison across periods or with other companies. This is different from trend analysis, which looks at changes in items over time, and comparative financial statements, which show the absolute dollar amounts for items in different periods. Working capital schedules are a separate tool used to analyze a company's liquidity.

The Analysis Technique That Shows Each Item on the Financial