Why Is the Common-Size Income Statement Valuable to the Analyst

question 17

Multiple Choice

Why is the common-size income statement valuable to the analyst?

• A) The common-size income statement shows the relative magnitude of revenues and expenses to total assets.
• B) The common-size income statement allows the analyst to compare the firm to itself from year-to-year, but not to its competitors.
• C) The common-size income statement shows the relative magnitude of revenues and expenses relative to profits.
• D) The common-size income statement shows the relative magnitude of expenses relative to net sales.

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