A firm has sales of $1,700,net income of $200,net fixed assets of $600,and current assets of $400.The firm has $150 in inventory.What is the common-size statement value of inventory?
A)8.3%
B)12.5%
C)15.0%
D)33.3%
E)50.0%

Question

Quizplus · Accepted Answer

Common-size statement value of inventory can be calculated using the formula:

Inventory/Common Total Assets

Common Total Assets = Net Fixed Assets + Current Assets = $600 + $400 = $1,000

Inventory/Common Total Assets = $150/$1,000 = 0.15 = 15%

Therefore, the common-size statement value of inventory is 15%, which is option C.

A Firm Has Sales of $1,700,net Income of $200,net Fixed