Why is the common-size income statement valuable to the analyst? The common-size

Question

Why is the common-size income statement valuable to the analyst?

The common-size income statement allows the analyst to compare the firm to itself from year-to-year, but not to its competitors.

The common-size income statement shows the relative magnitude of revenues and expenses relative to profits.

The common-size income statement shows the relative magnitude of expenses relative to net sales.

The common-size income statement shows the relative magnitude of revenues and expenses to total assets.

Explanation / Answer

Why is the common-size income statement valuable to the analyst?

answer is

The common-size income statement shows the relative magnitude of expenses relative to net sales.

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