COMMON SIZED PERCENTAGES Definition

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COMMON SIZED PERCENTAGES are financial statements in which each item is expressed as a percentage of a major financial statement component. In the Income Statement, each "Common Size %" is the field amount expressed as a percent of "Net Revenues." In the Balance Sheet, each "Common Size %" is the amount in the category as a percent of Total Assets. Common sized financial statements can be used to: a. identify key structural changes in a company's financial data over a period of time; b. more easily compare the financial data of firms that vary significantly in size; and, c. compare a company's financial data to industry norms.

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CREDIT RECORD (CR) is an entry in a double-entry bookkeeping system recording an increase in a liability; an owners equity item or revenue; or a decrease in an asset or an expense. Credit entries are conventionally made on the right-hand side of T accounts.

OPEN MARKET OPERATIONS is the purchases and sales of gov­ernment and certain other securities in the open market by the New York Federal Reserve Bank as directed by the Federal Reserve in order to influence the volume of money and credit in the economy. Purchases inject reserves into the depository system and foster expansion in money and credit; sales have the opposite effect. Open market operations are the Federal Reserve's most impor­tant and most flexible monetary policy tool. They are used to promote higher or lower growth in money and credit, and to offset undesirable changes in the reserve positions of depository institutions stemming from movements in currency, float, Treasury deposits and other factors.

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