Total Assets for a company are $700,000; Accounts Payable is $75,000; Bonds Payable is $225,000; Common Stock is $300,000 and Retained Earnings is $100,000. The common-size percent for Accounts Payable is:

Question

Business

Zander Rogers

14 October, 21:55

Total Assets for a company are $700,000; Accounts Payable is $75,000; Bonds Payable is $225,000; Common Stock is $300,000 and Retained Earnings is $100,000. The common-size percent for Accounts Payable is:

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Answers (1)

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Kara Murphy · Answer 1

10.71%

Explanation:

common size percent = accounts payable / total assets = $75,000 / $700,000 = 0.1071 or 10.71%

You can use common size ratios for better analyzing the financial statement, since you will use only percentages that can be compared between similar companies that have different sizes or different sales volumes.