If a retailer's estimated sales are $1 million and assets in the firm's industry tend to run about 25 percent of sales, the retailer should maintain assets of approximately which amount?

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Prepare for the AAMI Small Business Management Test with flashcards and multiple choice questions; each question comes with hints and explanations. Get exam ready!

Multiple Choice

If a retailer's estimated sales are $1 million and assets in the firm's industry tend to run about 25 percent of sales, the retailer should maintain assets of approximately which amount?

This question tests how to use an asset-to-sales ratio to estimate how much a business should invest in assets based on expected sales. If industry assets run about 25% of sales, you multiply the expected sales by 0.25. For $1,000,000 in sales, 0.25 × 1,000,000 = $250,000. So the retailer should maintain assets around $250,000. The other amounts correspond to 20%, 30%, or 35% of sales (200,000; 300,000; 350,000), which don’t match the given 25% benchmark.

If a retailer's estimated sales are $1 million and assets in the firm's industry tend to run about 25 percent of sales, the retailer should maintain assets of approximately which amount?

Prepare for the AAMI Small Business Management Test with flashcards and multiple choice questions; each question comes with hints and explanations. Get exam ready!

If a retailer's estimated sales are $1 million and assets in the firm's industry tend to run about 25 percent of sales, the retailer should maintain assets of approximately which amount?

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