How is a common-size income statement prepared?
A)Each income statement item is expressed as a percentage of total assets.
B)Each income statement item is expressed as a percentage of net sales.
C)Each income statement item is expressed as a percentage of net income.
D)Each income statement item is expressed as a percentage of cash flow.

Question

Quizplus · Accepted Answer

In a common-size income statement, each income statement item is expressed as a percentage of net sales. This allows for easier comparison and analysis of expenses and profitability across different periods or companies.

How Is a Common-Size Income Statement Prepared