Question

A firm has inventory of $11,400, accounts payable of $9,800, cash of $750, net fixed assets of $13,125, long-term debt of $9,500, accounts receivable of $6,600, and total equity of $11,700. What is the common-size percentage for the inventory?

Answer 1

Answer:

39.19%

Explanation:

Calculation to determine the common-size percentage for the net fixed assets

Using this formula

Common-size percentage=Net fixed assets /(Inventory+Cash+Net fixed assets+Accounts receivable )

Let plug in the formula

Common-size percentage=$12,150 / ($11,400 + $850 + $12,150 + $6,600)

Common-size percentage= 39.19%

Therefore the common-size percentage for the net fixed assets is 39.19%