Explain How to Create a Common Size Income Statement and a Common

question 64

Essay

Explain how to create a common size income statement and a common size balance sheet.Provide at least three reasons why analysts find the creation of common size statements to be a useful practice.

---

Definitions:

Bystander Effect

A social psychological phenomenon in which individuals are less likely to offer help to a victim when other people are present, under the assumption that someone else will take action.

Scapegoat Theory

A social psychological concept that suggests individuals or groups are unfairly blamed for problems not of their making.

Mere Exposure Effect

A psychological phenomenon in which repeated exposure to a stimulus increases an individual's preference for that stimulus.

Ingroup Bias

Describes the tendency to favor members of one's own group over those from external groups.