Common size financial statements represent all

1) Common ‐ size financial statements represent all figures on the financial statements
A) in inflation adjusted dollars from
B) as if all companies being compared had the same
C) as if all companies being compared had the
D) as a percentage of either sales or
Answer:
Feedback: For a common ‐ size income statement , divide each entry in the income statement
common ‐ size balance sheet , divide each entry in the balance sheet
a base year.
total revenue.
same total assets.
total assets.
D
by sales, and for a
by total assets.
2) The debt ratio is a measure of a firm ʹ s
A
or gearing. Debt ratio tells
the firm use, the more is the
3) Which of the following statements is true?
plant, property and
than the current ratio.
accounts receivable.
its current assets.
B
than the current ratio and
can be converted into
the numerator of the
That is why quick
firm’s liquidity.