Which of the following below generally is the most useful in analyzing companies of different sizes?

Question

Quizplus · Accepted Answer

Common-size financial statements are the most useful in analyzing companies of different sizes because they allow for a comparison of financial information on a percentage basis, making it easier to compare companies' financial position, performance, and cash flow. Comparative statements show a company's financial performance for two or more periods, but they may not provide an accurate comparison between different-sized companies. Price-level accounting is useful for adjusting financial statements for inflation, but it may not be the most relevant factor to consider when comparing different-sized companies. Audit reports provide information about the validity of a company's financial statements but do not provide a comparison between different-sized companies.

Which of the Following Below Generally Is the Most Useful