Which of the following is MOST helpful in comparing companies of different sizes?
A)Ratio analysis
B)Using common-sized statements
C)Both ratio analysis and using common-sized statements
D)Neither one

Question

Quizplus · Accepted Answer

Ratio analysis and common-sized statements both allow for comparison between companies of different sizes. Ratio analysis calculates ratios that indicate a company's performance relative to its size, while common-sized statements express financial statement line items as a percentage of a common base such as total assets or revenues, making it easier to compare companies of varying sizes.

Which of the Following Is MOST Helpful in Comparing Companies