___ allows you to compare the financial statements of large companies with the financial statements of smaller companies, because you are comparing percentages instead of rupees.

Comparative income statements

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Common size income statements

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Comparative balance sheet

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Common size balance sheet

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Solution

The correct option is B
Common size income statements

Common size statement allows you to compare the financial statements of large companies with the financial statements of smaller companies, because you are comparing percentages instead of rupees

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The ultimate purpose of the comparative (Income) financial statement analysis is as follows :

Which statement express all items of financial statement as a percentage of some common base such as total assets for balance sheet?

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