8. Analyzing ratios One of the most important applications of ratio analysis is to compare a company's performance with that of other players in the industry or to compare its own performance over a period of time. Such analyses are referred to as a comparative analysis and trend analysis, respectively. A common size analysis requires the representation of financial statement data in terms of a single financial statement item (or base account or value). What is the most commonly used base item for a common size income statement? Net sales Total liabilities Total assets Stockholders' equity Suppose you are conducting an analysis of the financial performance of Green Caterpillar Garden Supplies Ine, over the past three years. The company did not issue new shares during these three years, and has faced some operational difficulties. The company has thus pillot tested some new forecasting strategies foc better operations management. You have coliected the company's relevant financial data, made reasonable assumptions based on the information available, and calculated the following ratios. Based on the preceding information, your calculations, and your assumptions, which of the following statements can be included in your analysis report? Check all that appiy. The copany's creditworthiness has improved over these three years as evidenced by the increase in its debt-to-equity ratio over time. Green Caterpmlar Garden Supplies incis ability to meet its debt obligations has worsened since its debt-to-equity ratio increased from 0.50 to 0.64. The marknt value of Green Caterpaliar Garden Supplies Incis common shares declined over the three years. A plausible reason why Green Caterpitar Garden Supplies incis price/cash fow ratio has increased is that investors expect higher cash fow per share in the future