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.

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Definitions:

Arrival Rate

In queuing theory, the average rate at which tasks, customers, or entities arrive at a service station or system.

Queuing System

The method by which queues of customers or items are managed by an entity, focusing on order service, wait times, and allocation of resources.

Utilization Rate

The percentage of capacity or capability that is being used effectively at a given time.

Poisson Distribution

A probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space, assuming these events happen with a known constant rate and independently of the time since the last event.