Question

Assume a company has sales of $2,700,000, total assets of $4,400,000, current assets of $160,000, net income of $350,000, and Inventory of $90,000. If it is performing vertical analysis, what percentage would be assigned to inventory?

Answer 1

In vertical analysis, the percentage assigned to inventory is calculated by dividing the inventory amount by the total assets and multiplying by 100.

In vertical analysis, the percentage assigned to inventory can be calculated by dividing the inventory amount by the total assets and then multiplying by 100. In this case, the inventory amount is $90,000 and the total assets are $4,400,000.

Therefore, the percentage assigned to inventory is:

($90,000 / $4,400,000) * 100 = 2.045%