Question
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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