The ________ is a popular approach for evaluating profitability in relation to sales by expressing each item on the income statement as a percent of sales.
A) retained earnings statement
B) common-size balance sheet
C) common-size income statement
D) profit and loss statement

Question

Quizplus · Accepted Answer

The common-size income statement expresses each item on the income statement as a percentage of sales, making it a useful tool for evaluating profitability in relation to sales. The retained earnings statement shows the changes in a company's retained earnings over a period of time, the common-size balance sheet expresses each item on the balance sheet as a percentage of total assets, and the profit and loss statement is another term for the income statement.

The ________ Is a Popular Approach for Evaluating Profitability in Relation