Question

The term "spreading the financial statements" refers to __________

evaluating the debt levels.
creating common-size financial statements.
comparing the statements to the industry average.
calculating the internal and sustainable growth rate.

Answer 1

The correct answer is letter "B": creating common-size financial statements.

Step-by-step explanation:

In financial accounting, the phrase "spreading the financial statements" equals recording the common-size financial statement. By this, information is displayed in the Balance Sheet as a percentage of a common base figure. The common-size statement typically uses total sales revenue as the common base.