Question

A firm has sales of $1,110, net income of $215, net fixed assets of $522, and current assets of $278. The firm has $90 in inventory. What is the common-size balance sheet value of inventory?

Answer 1

11.25%

Step-by-step explanation:

The common size balance sheet value of inventory is calculated as; First we need to get the value of total assets.

Total assets

= Net fixed assets + Current assets

= $522 + $278

= $800

Common size balance sheet value of inventory

= Inventory / Total assets

= $90 / $800

= 11.25%