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[The following information applies to the questions displayed below.] Simon Company's year-end...

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Accounting

$[$ The following information applies to the questions displayed below. $]$

Simon Company's year $-$ end balance sheets follow.

At December $31$ Current Year $1$ Year Ago $2$ Years Ago

Assets

Cash $ $25, 460$ $ $30, 368$ $ $31, 627$

Accounts receivable, net $73, 791 53, 144 41, 756$

Merchandise inventory $96, 565 68, 821 44, 474$

Prepaid expenses $8, 450 7, 812 3, 376$

Plant assets, net $236, 068 219, 453 191, 967$

Total assets $ $440, 334$ $ $379, 598$ $ $313, 200$

Liabilities and Equity

Accounts payable $ $109, 643$ $ $65, 435$ $ $42, 169$

Long $-$ term notes payable $80, 299 89, 054 69, 909$

Common stock, $ $10$ par value $162, 500 162, 500 162, 500$

Retained earnings $87, 892 62, 609 38, 622$

Total liabilities and equity $ $440, 334$ $ $379, 598$ $ $313, 200$

For both the current year and one year ago, compute the following ratios:

$1 .$ Express the balance sheets in common $-$ size percents.

$2 .$ Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total assets favourable or unfavourable?

$3 .$ Assuming annual sales have not changed in the last three years, is the change in merchandise inventory as a percentage of total assets favourable or unfavourable?

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