Common-Size Statements Are Income Statements and Balance Sheets in Which

question 75

True/False

Common-size statements are income statements and balance sheets in which the dollar figures have been converted into percentages.

---

Definitions:

Net Working Capital

A measure of a company's liquidity, operational efficiency, and short-term financial health, calculated as current assets minus current liabilities.

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term obligations with its current assets.

Long-Term Debt

Debt that is due for payment after more than one year, often used for financing or expanding the company.

Accounts Receivable

The total due to a business from its customers for goods or services which have been issued or consumed, but not yet compensated.