One Reason That a Common-Size Statement Is a Useful Tool

question 119

Multiple Choice

One reason that a common-size statement is a useful tool in financial analysis is that it enables the user to

• A) judge the relative potential of two companies of similar size in different industries.
• B) determine which companies in a single industry are of the same value.
• C) determine which companies in a single industry are of the same size.
• D) make a better comparison of two companies of different sizes in the same industry.

---

Definitions:

Basic Visual Information

The fundamental elements of what the eye perceives, such as color, shape, boundaries, movement, and spatial relationships.

Luminance

A measure of the intensity of light emitted from a surface per unit area in a given direction, which is used to describe the perceived brightness of an object.

Olfactory System

The sensory system responsible for smell, starting from the nasal cavity to the olfactory cortex in the brain.