Question

A firm has sales of $1,090, net income of $213, net fixed assets of $518, and current assets of $274. The firm has $88 in inventory. What is the common-size balance sheet value of inventory?

Answer 1

11.11%

Step-by-step explanation:

Calculation for the common-size balance sheet value of inventory

First step is to find the Total assets

Using this formula

Total Assets=Net fixed assets +Current assets

Let plug in the formula

Total assets = $518 + 274 = $792

Second step is to find the Common -size value of inventory

Using this formula

Common -size value of inventory = Inventory/ Total assets

Let plug in the formula

Common-size value of inventory = $88/$792

= .1111, or 11.11%

Therefore the Common-size value of inventory will be 11.11%