Question $3$

$1$ pts

You conduct a common size income statement analysis on ZM Inc. You find that its expenses decreased from $69\%$ to $64\%$ in the latest two years. How would you interpret this finding?

The company was not able to control the expenses when compared to the sales. This seems negative.

It does not tell any information about the company's expenses.

This is a good sign, indicating the company was able to control the expenses better when compared to the sales.

The total expenses must have gone up in terms of the dollar amount over this time period.