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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

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 analysisand 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?

Total liabilities

Stockholders' equity

Total assets

Net sales

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