A standardized financial statement presenting all items of the statement as a percentage of total is:
Correct answer: A. a common-size statement
- A. a common-size statement
- B. an income statemen
- C. a cash flow statement
- D. a balance sheet
Explanation
A common-size statement converts each item into a percentage of a common base, such as sales for an income statement or total assets for a balance sheet. This makes comparisons across firms or periods easier.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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