Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 36,740 $ 42,946 $ 44,736 Accounts receivable, net 108,593 74,412 60,238 Merchandise inventory 136,536 96,363 63,531 Prepaid expenses 11,949 11,385 5,020 Plant assets, net 322,735 306,405 273,875 Total assets $ 616,553 $ 531,511 $ 447,400 Liabilities and Equity Accounts payable $ 153,522 $ 89,825 $ 59,647 Long-term notes payable secured by mortgages on plant assets 113,594 125,915 100,853 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 185,937 152,271 123,400 Total liabilities and equity $ 616,553 $ 531,511 $ 447,400 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's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 36,740 $ 42,946 $ 44,736 Accounts receivable, net 108,593 74,412 60,238 Merchandise inventory 136,536 96,363 63,531 Prepaid expenses 11,949 11,385 5,020 Plant assets, net 322,735 306,405 273,875 Total assets $ 616,553 $ 531,511 $ 447,400 Liabilities and Equity Accounts payable $ 153,522 $ 89,825 $ 59,647 Long-term notes payable secured by mortgages on plant assets 113,594 125,915 100,853 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 185,937 152,271 123,400 Total liabilities and equity $ 616,553 $ 531,511 $ 447,400 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?
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter17: Financial Statement Analysis
Section: Chapter Questions
Problem 4E
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Simon Company's year-end
At December 31 | Current Yr | 1 Yr Ago | 2 Yrs Ago | |||||||
Assets | ||||||||||
Cash | $ | 36,740 | $ | 42,946 | $ | 44,736 | ||||
108,593 | 74,412 | 60,238 | ||||||||
Merchandise inventory | 136,536 | 96,363 | 63,531 | |||||||
Prepaid expenses | 11,949 | 11,385 | 5,020 | |||||||
Plant assets, net | 322,735 | 306,405 | 273,875 | |||||||
Total assets | $ | 616,553 | $ | 531,511 | $ | 447,400 | ||||
Liabilities and Equity | ||||||||||
Accounts payable | $ | 153,522 | $ | 89,825 | $ | 59,647 | ||||
Long-term notes payable secured by mortgages on plant assets |
113,594 | 125,915 | 100,853 | |||||||
Common stock, $10 par value | 163,500 | 163,500 | 163,500 | |||||||
185,937 | 152,271 | 123,400 | ||||||||
Total liabilities and equity | $ | 616,553 | $ | 531,511 | $ | 447,400 | ||||
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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