If a firm's trends in common-size statements are generally in line with those of the rest of the industry,problems are less likely than if the firm's trends are worse than the industry average.

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Common-size statements allow for comparison of firms within an industry by expressing financial data as a percentage of a common base. If a firm's trends in common-size statements are generally in line with those of the rest of the industry, it suggests that the firm is performing similarly to its competitors and may not be experiencing significant problems. On the other hand, if a firm's trends are worse than the industry average, it may indicate that the firm is struggling and could potentially face problems in the future.

If a Firm's Trends in Common-Size Statements Are Generally in Line