A financial statement that shows each item as a percentage of one key item on the statement is referred to as:
A) benchmarking.
B) common-size statement.
C) horizontal analysis.
D) statement of cash flows.

Question

Quizplus · Accepted Answer

A common-size statement expresses each line item as a percentage of a key item on the statement, such as net sales or total assets. This allows for easy comparison between different companies or periods. Benchmarking involves comparing a company's performance to industry standards, while horizontal analysis compares financial data over time. The statement of cash flows shows how cash flows into and out of a company during a specified period.

A Financial Statement That Shows Each Item as a Percentage