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

Laney

Business

29 December, 00:26

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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Damaris Cohen · 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.