Simon Company's year-end balance sheets follow.
At December 31 Current Year 1 Year Ago 2 Years Ago
Assets Cash $ 27,379 $ 33,296 $ 33,667
Accounts receivable, net 81,757 54,874 43,569
Merchandise inventory 98,762 76,250 47,343
Prepaid expenses 8,728 8,401 3,741
Plant assets, net 252,108 231,260 205,080
Total assets $ 468,734 $ 404,081 $ 333,400
Liabilities and Equity Accounts payable $ 116,715 $ 66,241 $ 44,009
Long-term notes payable 85,478 95,727 74,418
Common stock, $10 par value 162,500 162,500 162,500
Retained earnings 104,041 79,613 52,473
Total liabilities and equity $ 468,734 $ 404,081 $ 333,400
For both the current year and one year ago, compute the following ratios:
1. Express the balance sheets in common-size percentages.
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?
