You are comparing the common-size financial statements for two firms in the same industry that have very similar operations.You note that their sales revenues are similar in dollar value but yet the common-size EBIT for one firm is 30 percent compared to only 26 percent for the other firm.What are some possible explanations for this difference given the strong similarities of the two firms?

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The Answer of You are comparing the common-size financial statements for two firms in the same industry that have very similar operations.You note that their sales revenues are similar in dollar value but yet the common-size EBIT for one firm is 30 percent compared to only 26 percent for the other firm.What are some possible explanations for this difference given the strong similarities of the two firms?

You Are Comparing the Common-Size Financial Statements for Two Firms