Question

Rock Construction has current assets of $45m, total liabilities and equity of $67m, and sales of $59m. How would current assets be expressed on a common-size balance sheet?

A) 67.2%
B) 76.3%
C) 67.2%
D) 76.3%

Answer 1

The correct answer is option a. The percentage of current assets on a common-size balance sheet is 67.2%.

Step-by-step explanation:

A common-size balance sheet expresses each item as a percentage of total assets. To find the percentage of current assets on a common-size balance sheet, divide current assets by total assets and multiply by 100.

In this case, the current assets are $45m and the total assets and equity are $67m. So the percentage of current assets on the common-size balance sheet would be:

($45m / $67m) * 100 = 67.16%

Therefore, the correct answer is 67.2% (option A).