The Purpose of Common Size Financial Statements Is To

question 17

Multiple Choice

The purpose of common size financial statements is to:

• A)compare the amount of common stock to other types of stock.
• B)make comparisons between firms of different sizes.
• C)make comparisons between different time periods.
• D)Make comparisons between firms of different sizes and between different time periods.

---

Definitions:

Treasury Stock

Shares of a company's own stock that it has reacquired from shareholders, but not retired, and are therefore not considered when calculating earnings per share or dividends.

Common Stock

A type of equity security that represents ownership in a corporation and entitles shareholders to vote on corporate matters and receive dividends.

Net Increase

The amount by which a company's financial or operational metric grows within a specific period.