Which of the following is generally the most useful in analyzing companies of different size?
A)Comparative financial statements.
B)Horizontal analysis.
C)Common size financial statements.
D)Trend analysis.

Question

Quizplus · Accepted Answer

Common size financial statements express each line item as a percentage of a base amount (such as total assets or net sales), allowing for easy comparison between companies of different sizes. This method eliminates the bias that may come from looking at raw dollar values, making it the most effective option for analyzing companies of different scales.

Which of the Following Is Generally the Most Useful in Analyzing