A common-sized income statement permit(s)
A)analysis of changes or differences in relations between revenues, expenses, and net income.
B)identification of relations that the analyst should explore further.
C)analysis of changes or differences in relations between assets, liabilities, and shareholders' equity.
D)both choices a and b.
E)both choices a and c.

Question

Quizplus · Accepted Answer

A common-sized income statement provides a percentage breakdown of each line item in relation to total revenues. This allows for analysis of changes or differences in relations between revenues, expenses, and net income, as well as identification of relations that the analyst should explore further. It does not, however, provide information on changes or differences in relations between assets, liabilities, and shareholders' equity, which would require a common-sized balance sheet.

A Common-Sized Income Statement Permit(s)