Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 33,325 $ 40,941 $ 41,409 Accounts receivable, net 95,601 68,169 55,770 Merchandise inventory 123,917 93,757 59,995 Prepaid expenses 11,170 10,643 4,555 Plant assets, net 312,345 283,350 260,771 Total assets $ 576,358 $ 496,860 $ 422,500 Liabilities and Equity Accounts payable $ 143,513 $ 82,290 $ 55,212 Long-term notes payable secured by mortgages on plant assets 111,606 111,992 92,439 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 157,739 139,078 111,349 Total liabilities and equity $ 576,358 $ 496,860 $ 422,500 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?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 14BEA: Last year, Nikkola Company had net sales of 2.299.500,000 and cost of goods sold of 1,755,000,000....

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Simon Company's year-end balance sheets follow.

At December 31	Current Yr	1 Yr Ago	2 Yrs Ago
Assets
Cash		$	33,325	$	40,941	$	41,409
Accounts receivable, net			95,601		68,169		55,770
Merchandise inventory			123,917		93,757		59,995
Prepaid expenses			11,170		10,643		4,555
Plant assets, net			312,345		283,350		260,771
Total assets		$	576,358	$	496,860	$	422,500
Liabilities and Equity
Accounts payable		$	143,513	$	82,290	$	55,212
Long-term notes payable secured by mortgages on plant assets			111,606		111,992		92,439
Common stock, $10 par value			163,500		163,500		163,500
Retained earnings			157,739		139,078		111,349
Total liabilities and equity		$	576,358	$	496,860	$	422,500

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?

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