In a Common Size Income Statement, the 100% Figure Is

question 82

Multiple Choice

In a common size income statement, the 100% figure is:

• A) net cost of goods sold.
• B) net income.
• C) gross profit.
• D) net sales.

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Definitions:

Cash Flow on Total Assets

A measure of the efficiency with which a company generates cash from its assets, calculated as cash flow from operations divided by total assets.

Ability to Meet Obligations

A financial assessment of whether a company or individual has the resources necessary to pay off their debts as they come due.

Return on Assets

A profitability ratio that measures how efficiently a company is using its assets to generate earnings.

Direct Method

In cash flow reporting, a method that shows the specific sources and uses of cash, categorizing cash flows into operating, investing, and financing activities.