Common-Size Analysis of ABC Corporation

Very Hard Analysis Techniques Common-size Statements

ABC Corporation recently released its common-size financial statements for the fiscal year ending December 31, 2023. The income statement revealed that total revenues were $1,000,000, cost of goods sold (COGS) were $600,000, and total operating expenses were $200,000. The balance sheet showed total assets of $2,000,000, total liabilities of $1,200,000, and total equity of $800,000.

Based on these figures, which of the following statements is true regarding ABC Corporation's common-size analysis?

The common-size operating expenses represent 20% of total assets.

Cost of goods sold as a percentage of total revenue is 60%.

Total liabilities as a percentage of total equity is 150%.

Hint

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% Correct89%