The income statement provides information for assessing the operating profitability of a firm.One tool used for analysis is the common-size income statement that expresses
A)each expense and net income as a percentage of revenues.
B)each revenue and net income as a percentage of expenses.
C)each expense and net income as a percentage of total assets.
D)each expense and net income as a percentage of shareholders' equity.
E)each revenue and net income as a percentage of shareholders' equity.

Question

Quizplus · Accepted Answer

The common-size income statement expresses each expense and net income as a percentage of revenues, allowing for easy comparison over time and among different companies of varying sizes. This helps to assess the operating profitability of a firm.

The Income Statement Provides Information for Assessing the Operating Profitability