Question

Oil Creek Auto has sales of $3,340, net income of $274, net fixed assets of $2,600, and current assets of $920. The firm has $430 in inventory. What is the common-size statement value of inventory?

Answer 1

Answer:

12.22%

Explanation:

Calculation of common size statement value of inventory can be done easily here by just one simple formula

Formula: Inventory common size = $\frac{Inventory}{Total assets}$ x 100

As you can see here inventory is given in the question data bu we have to calculate total assets to find inventory common  size

Total assets = Net fixed assets+ Current assets

Total assets = $2,600 + $920

Total assets = $3,520

Now we have total assets value lets put it into inventory common size formula

Inventory common size =  $\frac{430}{3520}$ x 100

Inventory common size = 12.22%