
Introduction:
Common Size Comparative Statements
• Common size statements are comparative financial statements that facilitate data analysis and comparison of the financial results with the results of previous time periods.
• While preparing a common size financial statement, the elements of the financial statements such as expenses, costs and net results (
• The individual cost elements are then analyzed and year on year analysis is performed in order to check if the growth in revenues correspond to a matching proportionate increase and vice versa.
• The main purpose of common size financial statements is to enable comparison with results of previous financial time periods and also facilitate tracking and review.
To Calculate:
Express the financial statements in common size percents and provide analysis on the results.

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Chapter 17 Solutions
Fundamental Accounting Principles
- Complete the table given below and compute the WACC from theinformation provided after the table template. capital component market value weight cost of capital weight x cost of capital debt common stock preferred shares The following balance sheet extract relates to the Spread-Out AirlinesLtd.Bonds Payable $1,000,000Preferred Stock $2,000,000Common Stock $3,000,000 Additional Information:1. The bonds are 8%, annual coupon bonds, with 9 years tomaturity and are currently selling for 90% of par.2. The company’s common shares which have a book value of $25per share are currently selling at $20 per share.3. The preferred shares are 5% preferred shares with a bookvalue of $100 per share. These shares are currentlyselling at $80 per share.4. The company has an equity beta of 1.35 and the current Treasury bill rate is 3.0%. The market risk premium is1.5%5. The company’s tax rate is 30%.arrow_forwardCalculate the net sales for this financial accounting questionarrow_forwardQuick answer of this accounting questionsarrow_forward
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