Question

You would like to compare your firm's cost structure to that of your competitors. However, your competitors are much larger in size than your firm. Which one of these would best enable you to compare costs across your industry? Multiple Choice a. Pro forma balance sheet b. Common-size income statement c. Statement of cash flows

Answer 1

Answer:

b. Common-size income statement

Explanation:

The common-size income statement refers to the income statement which show the each item of the income statement with respect to the percentage of sales revenue.

It helps to analyze the company overall productivity, financial position, performance of the company that helps the company to compare with its competitors.