Explanation Common-size financial statements are the statements when all the items of a financial statement are expressed in a common basis. Common sizing of income statement is done basically by expressing its all the items as percentage of its sales revenue. Example of a common-size financial statement (income statement) is as under − Common Size financial statement ( Income statement) 2017 Common size 2018 Common size Sales 200,000 100.00% 240,000 100.00% Less: Cost of Goods sold 80,000 40.00% 93600 39.00% Gross profit 120,000 60.00% 146,400 61.00% Less: Operating Expenses Depreciation 10,000 5.00% 12,500 5.21% General administration expenses 20,000 10.00% 25,000 10.42% selling expenses 30670 15.34% 45080 18.78% Total operating expenses 60,670 30.34% 82,580 34.41% Net income 59,330 29.67% 63,820 26.59% Common sizing of balance sheet is done basically by expressing its all the items as percentage of its total assets or its total liabilities or shareholder's equity. Example of a common-size financial statement (balance sheet) is as under − Comparative Balance sheet 2017 Common size Assets Current assets Cash 10,000 0.53% Accounts Receivables 12,000 0.63% Inventory 30,250 1.59% Total current assets 52,250 2...

24th Edition

ISBN: 9781259916960

Author: Wild, John J., Shaw, Ken W.

Publisher: Mcgraw-hill Education,

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Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 17, Problem 3DQ

To determine

Concept Introduction:

Common-size comparative financial statements:

Common-size financial statements are the statements when all the items of a financial statement are expressed in a common basis. Common sizing of balance sheet is done basically by expressing its all the items as percentage of its total assets or its total liabilities or shareholder's equity

The items which are usually assigned a 100% value on

A common-size balance sheet

A common-size income statement

Expert Solution & Answer

Chapter 17 Solutions

Fundamental Accounting Principles

Ch. 17 - Prob. 1DQ Ch. 17 - Prob. 2DQ Ch. 17 - Prob. 3DQ Ch. 17 - 4. What three factors would influence your...Ch. 17 - Prob. 5DQ Ch. 17 - Prob. 6DQ Ch. 17 - Prob. 7DQ Ch. 17 - Prob. 8DQ Ch. 17 - Prob. 9DQ Ch. 17 - Prob. 10DQ

Ch. 17 - What ratios would you compute to evaluate...Ch. 17 - Why would a company’s return on total assets be...Ch. 17 - 13. Where on the income statement does a company...Ch. 17 - Prob. 14DQ Ch. 17 - Prob. 15DQ Ch. 17 - Prob. 16DQ Ch. 17 - Prob. 17DQ Ch. 17 - Prob. 1QS Ch. 17 - QS 17-2 Standard of comparison C2 Identify which...Ch. 17 - Prob. 3QS Ch. 17 - Trend percents P1 Use the following information to...Ch. 17 - QS17-5 Common-size analysis P2 Refer to the...Ch. 17 - QS 17-6 Computing current ratio and acid-test...Ch. 17 - QS 17-7 Computing accounts receivable turnover and...Ch. 17 - QS 17-8 Computing inventory turnover and days'...Ch. 17 - QS17-9 Computing total asset turnover P3 Dundee...Ch. 17 - Prob. 10QS Ch. 17 - Prob. 11QS Ch. 17 - QS 17-12 Computing price-earnings ratio and...Ch. 17 - Prob. 13QS Ch. 17 - Prob. 14QS Ch. 17 - QS 17-15A Identifying unusual and/or infrequent...Ch. 17 - Exercise 17-1 Building blocks of analysis Match...Ch. 17 - Prob. 2E Ch. 17 - Prob. 3E Ch. 17 - Prob. 4E Ch. 17 - Prob. 5E Ch. 17 - Prob. 6E Ch. 17 - Prob. 7E Ch. 17 - Prob. 8E Ch. 17 - Prob. 9E Ch. 17 - Prob. 10E Ch. 17 - Exercise 17-11 Analyzing profitability P3 Q Refer...Ch. 17 - Prob. 12E Ch. 17 - Prob. 13E Ch. 17 - Prob. 14E Ch. 17 - Prob. 15E Ch. 17 - Exercise 17-16 Interpreting financial ratios A1 P3...Ch. 17 - Prob. 17E Ch. 17 - Prob. 18E Ch. 17 - Problem 17-1A Calculating and analyzing trend...Ch. 17 - Problem 17-2A Ratios, common-size statements, and...Ch. 17 - Problem 17-3A Transactions, working capital, and...Ch. 17 - Problem 17-4A Calculating financial statement...Ch. 17 - Prob. 5APSA Ch. 17 - Prob. 6APSA Ch. 17 - Prob. 1BPSB Ch. 17 - Prob. 2BPSB Ch. 17 - Prob. 3BPSB Ch. 17 - Prob. 4BPSB Ch. 17 - Prob. 5BPSB Ch. 17 - Prob. 6BPSB Ch. 17 - SP 17 Use the following selected data from...Ch. 17 - Prob. 1AA Ch. 17 - Prob. 2AA Ch. 17 - Prob. 3AA Ch. 17 - BTN 17-1 Refer to Apple’s financial statements in...Ch. 17 - Prob. 2BTN Ch. 17 - Prob. 3BTN Ch. 17 - Prob. 4BTN Ch. 17 - Prob. 5BTN Ch. 17 - Prob. 6BTN

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