Question:
The statement which expresses all items of a financial statement as a percentage of some common base is:
The statement which expresses all items of a financial statement as a percentage of some common base is:
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Common Size Statements help in vertical analysis by simplifying comparisons between firms or across periods regardless of size.
Updated On: Jul 15, 2025
- Comparative Statement
- Common Size Statement
- Statement of Profit and Loss
- Position Statement
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The Correct Option is B
Solution and Explanation
A Common Size Statement expresses all components of a financial statement (like balance sheet or income statement) as a percentage of a common base:
- For Balance Sheet: Each item is shown as a percentage of total assets or total liabilities.
- For Income Statement: Each item is shown as a percentage of total revenue.
- For Balance Sheet: Each item is shown as a percentage of total assets or total liabilities.
- For Income Statement: Each item is shown as a percentage of total revenue.
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