Common-size financial statements represent all figures on the financial statements [blank].
A)in inflation-adjusted dollars from a base year
B)as if all companies being compared had the same total revenue
C)as if all companies being compared had the same total assets
D)as a percentage of either sales or total assets

Question

Quizplus · Accepted Answer

Common-size financial statements show each line item as a percentage of either sales (for income statement) or total assets (for balance sheet). This allows for easier comparison between companies of different sizes or within the same company over time. Options A, B, and C are not the correct explanations for common-size financial statements.

Common-Size Financial Statements Represent All Figures on the Financial Statements