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Common-size statement
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a standardized financial statement presenting all items in percentage terms. Balance sheet items are shown as a percentage of assets and income statement items as a percentage of sales.
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terms list

Common-size statement
a standardized financial statement presenting all items in percentage terms. Balance sheet items are shown as a percentage of assets and income statement items as a percentage of sales.
Financial ratios
Relationships determined from a firm's financial information and used for comparison purposes
Du Pont identity
popular expression breaking ROE into three parts: operating efficiency, asset use efficiency, and financial leverage
Internal growth rate
the maximum possible growth rate for a firm that relies only on internal financing
Sustainable growth rate
the maximum possible growth rate for a firm that maintains a constant debt ratio and doesn't sell new stock
Standard Industrial Classification (SIC) code:
U.S. government code used to classify a firm by its type of business operations
Profit Margin
determines operating efficiency
Total asset turnover
determines asset use efficiency
Financial leverage
determines choice of optimal debt ratio
Dividend policy
determines choice of how much to pay to shareholders versus reinvesting in the firm
ROE =
PM * TAT * EM or (NI/Sales) (Sales/TA) (TA/TE)
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