Using Common-Size Balance Sheet Percentages to Project Individual Assets,liabilities,or Shareholders

Multiple Choice

Using common-size balance sheet percentages to project individual assets,liabilities,or shareholders' equity has all of the following shortcomings except:

A) Individual assets, liabilities, and shareholders' equity are not independent
Of each other.
B) If a company experiences changing proportions for investments in securities among its assets, other asset categories may show decreasing percentages in some years even though their dollar amounts are increasing.
C) Individual assets, liabilities, and shareholders' equity are independent
Of each other.
D) The common-size percentages do not permit the analyst to easily change
The assumptions about the future behavior of an individual asset or liability.