A common-size income statement expresses all income statement items
A) As a percentage of Current Assets.
B) As a percentage of Fixed Assets.
C) As a percentage of Total Assets.
D) As a percentage of Net Income.
E) As a percentage of Sales

Question

Quizplus · Accepted Answer

A common-size income statement expresses all income statement items as a percentage of Sales, allowing for easier comparisons across companies, industries, and time periods. By expressing each item as a percentage of Sales, the statement highlights the relative size and importance of each source of revenue and expense. This can help analysts and investors better understand a company's profitability, efficiency, and financial health.

A Common-Size Income Statement Expresses All Income Statement Items