Question

Simon Company's year-end balance sheets follow.

At December 31	Current Yr				1 Yr Ago			2 Yrs Ago
Assets
Cash		$	34,326		$	40,943		$	42,223
Accounts receivable, net			101,519			72,367			55,160
Merchandise inventory			125,088			96,575			62,397
Prepaid expenses			11,505			10,640			4,644
Plant assets, net			321,238			291,265			266,376
Total assets		$	593,676		$	511,790		$	430,800
Liabilities and Equity
Accounts payable		$	149,304		$	85,628		$	57,434
Long-term notes payable secured by mortgages on plant assets			109,379			115,357			94,255
Common stock, $10 par value			163,500			163,500			163,500
Retained earnings			171,493			147,305			115,611
Total liabilities and equity		$	593,676		$	511,790		$	430,800

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?

SIMON COMPANY Common-Size Comparative Balance Sheets December 31 Current Year 1 Year Ago 2 Years Ago Assets Cash % % % Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets % % % Liabilities and Equity Accounts payable % % % Long-term notes payable secured by mortgages on plant assets Common stock, $10 par Retained earnings Total liabilities and equity % % %

Answer 1