A firm has sales of $1,200, net income of $200, net fixed assets of $500, and current assets of $300.The firm has $100 in inventory.What is the common-size statement value of inventory?
A)8.3%
B)12.5%
C)20.0%
D)33.3%
E)50.0%

Question

Quizplus · Accepted Answer

The common-size statement value of inventory is calculated as (Inventory / Total Assets) * 100. Total assets = Net fixed assets + Current assets = $500 + $300 = $800. Thus, the common-size value of inventory is ($100 / $800) * 100 = 12.5%.

A Firm Has Sales of $1,200, Net Income of $200