Of the items listed below, the one most helpful in the comparison of different size companies is:
A)comparison of their net incomes.
B)horizontal analysis.
C)preparation of common-size financial statements.
D)comparison of their working capital balances.

Question

Quizplus · Accepted Answer

Preparation of common-size financial statements allows for the comparison of companies of different sizes by expressing all financial statements as percentages of total assets or sales. This eliminates the impact of size differences and allows for a more meaningful comparison.

Of the Items Listed Below, the One Most Helpful in the Comparison