Question

A firm has sales of $1,220, net income of $226, net fixed assets of $544, and current assets of $300. The firm has $101 in inventory. What is the common-size balance sheet value of inventory?

Answer 1

11.97%

Step-by-step explanation:

To get the common size balance sheet value of inventory , we need to calculate first the total asset value.

Total asset = Net fixed assets + Current assets

= $544 + $300

= $844

Therefore,

Common size value of inventory

= Inventory / Total assets

=$101/$844

= 0.1197

= 11.97%