Asked by Celina Singh on May 20, 2024
Verified
A corporation reported cash of $14,000 and total assets of $178,300 on its balance sheet.Its common-size percent for cash equals:
A) 0.0785%.
B) 7.85%.
C) 12.73%.
D) 1273%.
E) 7850%.
Common-size Percent
A financial analysis tool that converts income statement items into percentage of revenue, facilitating trend analysis and comparison.
Total Assets
The sum of all resources owned by a company, including cash, inventory, property, and equipment, reported on the balance sheet.
Cash
Liquid currency and readily accessible funds available in checking and savings accounts, often used to meet short-term financial obligations.
- Assess financial stability by calculating and interpreting ratios like the acid-test, current ratio, and accounts receivable turnover.
Verified Answer
= (14,000/178,300) x 100%
= 0.0785 x 100%
= 7.85%
Learning Objectives
- Assess financial stability by calculating and interpreting ratios like the acid-test, current ratio, and accounts receivable turnover.
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