On a common-size income statement, net income should be stated as a percentage of:
A) net income.
B) sales revenue.
C) gross profit.
D) total assets.

Question

Quizplus · Accepted Answer

On a common-size income statement, each line item is presented as a percentage of sales revenue. This includes net income, which is the last line item on the income statement. Expressing net income as a percentage of sales revenue can help to assess profitability relative to revenue.

On a Common-Size Income Statement, Net Income Should Be Stated