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fenil 13 April 2020 at 12:36 PM
One of the main difficulties in the comparison of financial statements between companies or between periods for the same company is the difference in size. A method to deal with the size difference is to a) make adjustments to each item on the income statement and balance sheet based on industry averages. b) state each item on the income statement and balance sheet as a percentage of a targeted base amount rather than as a numerical amount. c) state each item on the income statement and balance sheet as a percentage of a relevant base amount rather than as a numerical amount. d) make adjustments to each item on the income statement and balance sheet based on benchmarking.
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FACULTY 15 May 2020 at 06:23 PM
state each item on the income statement and balance sheet as a percentage of a relevant base amount rather than as a numerical amount.
(option C)
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Robert Fulton 14 April 2026 at 08:34 PM
I think the correct answer is c because common-size financial statements express each item as a percentage of a relevant base amount, which makes comparisons easier across companies and periods. This method removes the distortion caused by size differences and improves analysis of profitability and structure. Options a and d are less appropriate because they rely on external adjustments and benchmarking rather than standardised internal scaling. Option b is close but less precise in wording than c. For reference and additional context I also checked https://7bitcasino.com/tron-casino while reviewing similar analytical explanations and concepts in finance studies. in my personal opinion
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