What is the purpose of using common size balance sheets and common size income statements?
What will be an ideal response?
Answer: The purpose is to allow a company to compare its performance with its own prior performance or with the performance of other firms. It is not helpful to just compare numbers, but with common size statements firms can compare percentages, so that they can answer questions about how their own performance changed, and how their performance compares to that of other firms.
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A business with a share development index equal to 45 means that the business ________
A) can only achieve 45 percent of the total market share B) achieved a 45 percent growth in market share C) achieved only 45 percent of its share potential index D) achieved a 45 percent growth in competitive advantage E) has to achieve 45 percent more in market share to reach its potential market share
The IRR is the discount rate that equates the NPV of an investment opportunity with $0
Indicate whether the statement is true or false