Which of the Following Would Be Most Helpful in the Comparison

question 103

Multiple Choice

Which of the following would be most helpful in the comparison of different size companies?

• A)horizontal analysis
• B)comparison of their net incomes
• C)comparison of their working capital balances
• D)preparation of common-size financial statements

---

Definitions:

Induced Consumption

Consumer spending that increases when income increases, and decreases when income decreases, not including autonomous consumption that doesn’t change with income.

Disposable Income

Financial capacity reserved for household spending and savings after navigating through income tax deductions.

Autonomous Consumption

The level of consumption expenditure that occurs when income levels are zero, representing the base level of spending that must occur even in the absence of income.

Public Savings

The portion of national savings held by the government, typically reflected in budget surpluses.