Question

Simon Company's year-end balance sheets follow.

At December 31	Current Yr				1 Yr Ago			2 Yrs Ago
Assets
Cash		$	31,077		$	36,326		$	35,635
Accounts receivable, net			88,304			62,324			48,968
Merchandise inventory			109,915			83,180			53,200
Prepaid expenses			10,008			9,629			4,000
Plant assets, net			277,091			253,709			225,497
Total assets		$	516,395		$	445,168		$	367,300
Liabilities and Equity
Accounts payable		$	128,582		$	76,738		$	47,514
Long-term notes payable secured by mortgages on plant assets			96,111			105,460			80,362
Common stock, $10 par value			163,500			163,500			163,500
Retained earnings			128,202			99,470			75,924
Total liabilities and equity		$	516,395		$	445,168		$	367,300

1. Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to 1 decimal place.)
2. Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total assets favorable or unfavorable?
3. Assuming annual sales have not changed in the last three years, is the change in merchandise inventory as a percentage of total assets favorable or unfavorable?

Answer 1