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    Creating and Using Common-Size Financial Statements

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    (1) Describe a common-size financial statement. Explain how one is prepared.
    (2) Explain what a common-size financial statement report communicates about a company.

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    https://brainmass.com/business/accounting/creating-using-common-size-financial-statements-574904

    Solution Preview

    (1) Describe a common-size financial statement. Explain how one is prepared.

    A common-size financial statement is a financial statement that is prepared as a percentage on each line item. Instead of having revenue state $5,000 in year 1 and $4,000 in year 2, we would simply see a percentage, which shows the percentage of change between year 1 and year 2. Common-size financial statements are prepared by going through ...

    Solution Summary

    This solution discusses the preparation and use of common-size financial statements.

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