Question

Oil Creek Auto has sales of $3,340, net income of $274, net fixed assets of $2699, and current assets of $836. The firm has $417 in inventory. What is the common-size statement value of inventory? Express your answer as a DECIMAL, with at least THREE digits to the right of the decimal

Answer 1

inventory = 0.125

Step-by-step explanation:

It is asking us to express the inventory as a percent of sales

Th common-size statement refer to express each valeu a percent of sales:

Sales 3,340 100.000%

income 274 8.234% (274 divided by 3340 times 100)

fixed assets 2,699 80.809%

current assets 836 25.030%

Inventory 417 0.12485 (417/3,340)

the answer should be a decimal so we don't covert to percent.