Common size income statements make it easier to compare firms
A) that use different inventory valuation methods (FIFO vs. LIFO).
B) in different industries.
C) with different degrees of leverage.
D) of different sizes.

Question

Quizplus · Accepted Answer

Common size income statements express each item as a percentage of sales, which allows for easier comparison between companies of different sizes by standardizing the data.

Common Size Income Statements Make It Easier to Compare Firms