In comparing companies of different sizes, which of the following is most helpful?
A)Ratio analysis
B)Using common-sized statements
C)Neither ratio analysis nor common-sized statements
D)Both ratio analysis and using common-sized statements

Question

Quizplus · Accepted Answer

Both ratio analysis and using common-sized statements are helpful in comparing companies of different sizes. Ratio analysis helps to standardize financial information and make it comparable, while common-sized statements adjust financial information to a common base, making it easier to see relative differences between companies. Using both methods together provides a more comprehensive understanding of the financial performance and position of different companies.

In Comparing Companies of Different Sizes, Which of the Following