Using Common-Size Balance Sheet Percentages to Project Individual Assets,liabilities,or Shareholders

question 28

Multiple Choice

Using common-size balance sheet percentages to project individual assets,liabilities,or shareholders' equity has all of the following shortcomings except:

• A) Individual assets, liabilities, and shareholders' equity are not independent
• Of each other.
• B) If a company experiences changing proportions for investments in securities among its assets, other asset categories may show decreasing percentages in some years even though their dollar amounts are increasing.
• C) Individual assets, liabilities, and shareholders' equity are independent
• Of each other.
• D) The common-size percentages do not permit the analyst to easily change
• The assumptions about the future behavior of an individual asset or liability.

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Definitions:

Biological Model

A perspective in psychology and psychiatry that attributes complex phenomena, including mental disorders, to biological factors.

Cortex

The outer layer of the brain, responsible for higher-order functions such as thought, memory, and decision-making.

Brain

The organ in the head of living beings that controls thought, memory, feelings, and activity, central to the nervous system.

Models of Abnormality

Theoretical frameworks used to understand the causes and treatment of mental health disorders, including biological, psychological, and social factors.