On a common-size income statement, interest expense is shown as a percentage of
A)operating income.
B)net sales revenue.
C)net income.
D)gross profit.

Question

Quizplus · Accepted Answer

Interest expense is typically shown as a percentage of net sales revenue on a common-size income statement. This allows for a comparison of interest expenses across companies and industries, as well as an understanding of how much of each sales dollar is going towards paying for interest.

On a Common-Size Income Statement, Interest Expense Is Shown as a Percentage