What is the main purpose of common-size financial statements?
A) To remove the bias introduced by increasing revenue
B) To facilitate comparisons over time
C) To facilitate comparison between firms of different structure
D) To facilitate comparison between different-sized firms

Question

Quizplus · Accepted Answer

Common-size financial statements express each line item as a percentage of a base figure, allowing for easy comparison between firms of different sizes by standardizing financial data.

What Is the Main Purpose of Common-Size Financial Statements