Converting categories on financial statements from dollar terms to percentages results in
A) inflation-adjusted statements.
B) diverse rates of returns.
C) common-size statements.
D) constant dollar denominations.
E) equivalency comparison.

Question

Quizplus · Accepted Answer

Converting categories on financial statements from dollar terms to percentages results in common-size statements, where each line item is expressed as a percentage of a common base figure, typically total assets or total revenue. This allows for easier comparison between companies of different sizes or in different industries. The other options are not applicable in this scenario.

Converting Categories on Financial Statements from Dollar Terms to Percentages