8. analyzing ratios one of the most important applications of ratio analysis is to compare a company’s performance with that of other players in the industry or to compare its own performance over a period of time. such analyses are referred to as a comparative analysis and trend analysis, respectively. a common size analysis requires the representation of financial statement data in terms of a single financial statement item (or base account or value). what is the most commonly used base item for a common size income statement? total liabilities stockholders’ equity total assets net sales