g Firm ABC has assets of $80, sales of $75, and COGS of $40. Current assets totaling $50 consist of cash, accounts receivable and inventory. Current liabilities are $60. Cash is $20 and accounts receivable is $10. In a common size balance sheet, inventory (stated as a percent) would be equal to:

A balance sheet is a financial statement that shows a company's assets, liabilities, and shareholder equity at a given point in time. Balance sheets serve as the foundation for calculating investor rates of return and assessing a company's capital structure.

In a nutshell, a balance sheet is a financial statement that shows what a company owns and owes, as well as the amount of money invested by shareholders. Balance sheets can be used in conjunction with other important financial statements to perform fundamental analysis or calculate financial ratios.

The balance sheet provides an overview of a company's finances at a given point in time. It cannot provide a sense of trends over a longer time period on its own. As a result, the balance sheet should be compared to previous periods' balance sheets.

Investors can assess a company's financial health by employing a variety of ratios derived from its balance sheet, such as the debt-to-equity ratio and the acid-test ratio, among many others. The income statement and statement of cash flows, as well as any notes or addenda in an earnings report that may refer back to the balance sheet, provide valuable context for assessing a company's finances.

What is an inventory?

Inventory is the accounting of items, component parts, and raw materials that a business uses or sells. You practice inventory management as a business leader to ensure that you have enough stock on hand and to identify when there is a shortage.

The act of counting or listing items is referred to as "inventory." Inventory is a current asset in accounting and refers to all stock in various stages of production. Both retailers and manufacturers can continue to sell or build items if they keep stock. For most businesses, inventory is a major asset on the balance sheet; however, too much inventory can become a practical liability.

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