Common-Size Statements, which analyze financial statements by converting each line item into a percentage of a common base item, are also known as:
- ADynamic analysis
- BHorizontal analysis
- CVertical analysis
- DExternal analysis
Solution & Step-by-step Explanation
Common-size financial statements present quantities as percentages of a common baseline item within a single financial period (e.g., taking Revenue from Operations as in an Income Statement). This single-period, top-to-bottom structural analysis is called Vertical Analysis.