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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 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?

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 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
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 56P: The following selected information is taken from the financial statements of Arnn Company for its...
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Required information. [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Current Year. $ 25,603 74,949 91,435 8,163 233,807 $ 433,957 1 Year Ago $ 108,055 79,952 162,500 83,450 $ 433,957 $ 30,826 52,374 69,901 7,699 213,301 $374,101 Liabilities and Equity Accounts payable $63,223 Long-term notes payable. Common stock, $10 par value 88,625 163,500 Retained earnings 58,753 Total liabilities and equity $ 374,101 For both the current year and one year ago, compute the following ratios: 2 Years Ago $32,110 42,398 44,716 3,533 192,143 $314,900 $ 41,567 68,201 163,500 41,632 $314,900 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 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?
Transcribed Image Text:Required information. [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Current Year. $ 25,603 74,949 91,435 8,163 233,807 $ 433,957 1 Year Ago $ 108,055 79,952 162,500 83,450 $ 433,957 $ 30,826 52,374 69,901 7,699 213,301 $374,101 Liabilities and Equity Accounts payable $63,223 Long-term notes payable. Common stock, $10 par value 88,625 163,500 Retained earnings 58,753 Total liabilities and equity $ 374,101 For both the current year and one year ago, compute the following ratios: 2 Years Ago $32,110 42,398 44,716 3,533 192,143 $314,900 $ 41,567 68,201 163,500 41,632 $314,900 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 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?
Reg 2 and 3 Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to I decimal place.) 1 Req 1 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets SIMON COMPANY Common-Size Comparative Balance Sheets December 31 Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par Retained earnings Total liabilities and equity Req 1 Current Year 1 Year Ago 2 Years Ago Reg 2 and 3 % % O Show Transcribed Text 2. Change in accounts receivable 3 Change in merchandise inventory G Complete this question by entering your answers in the tabs below. % % 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? < Req 1 Reg 2 and 3> Show less A
Transcribed Image Text:Reg 2 and 3 Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to I decimal place.) 1 Req 1 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets SIMON COMPANY Common-Size Comparative Balance Sheets December 31 Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par Retained earnings Total liabilities and equity Req 1 Current Year 1 Year Ago 2 Years Ago Reg 2 and 3 % % O Show Transcribed Text 2. Change in accounts receivable 3 Change in merchandise inventory G Complete this question by entering your answers in the tabs below. % % 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? < Req 1 Reg 2 and 3> Show less A
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