- CFA Exams
- CFA Level I Exam
- Study Session 7. Financial Reporting and Analysis (2)
- Reading 24. Financial Analysis Techniques
- Subject 1. Analysis Tools and Techniques
CFA Practice Question
To gain insight into what portion of a company's assets is liquid, an analyst will most likely use ______.
A. the cash ratio
B. the current ratio
C. common-size balance sheets
Explanation: A common-size balance sheet expresses all balance sheet accounts as a percentage of total assets.
User Contributed Comments 2
| User | Comment |
|---|---|
| kingirm | I think it is subjective but maybe CFAInstitute thinks otherwise .... I always look at the current ratio first. Who use the common size financial statements anyways?! |
| jacojacobs | I also would go for current ratio, and only use common size FS to compare companies. |