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is not a total. For example, cash, inventory, and other assets
can be restated as percentages of total assets;
net income and each expense can be restated
as a percentage of sales revenue.
Financial statements that recast all items on the
statement as a percentage of a selected item are
called common-size financial statements. Financial Statement Analysis – Module 1 Financial Statement Analysis – Module 1 For example, each item on the income statement below
is expressed as a percentage of sales. Sales
Cost of goods sold
Total operating expenses
Income before taxes
Net income 2011
$ 4,766 Common-size financial statements allows for the
comparison of different companies of different
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This note was uploaded on 01/19/2014 for the course ACCTMIS 2200 taught by Professor Smith during the Spring '12 term at Ohio State.
- Spring '12