Use the following information to produce two common size balance sheets for the A Company as at the end of Years 3 and 4. Comment on whether you think the A Company’s balance sheet has improved or deteriorated between Years 3 and 4. The A Company: Balance sheets as at 31 December

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Year 4 Year 3 m fm m Em Non-current assets 35.8 33.1 Current assets Inventory 6.8 7.0 Receivables 5.4 5.1 Bank 4.5 10.5 16.7 22.6 Current liabilities Trade payables (20.0) 16.4 Net current assets/(liabilities) (3.3) 6.2 32.5 39.3 Ordinary share capital 4.0 4.0 Reserves 22.6 26.4 Shareholders' equity 26.6 30.4 Non-current liabilities: loan capital 5.9 8.9 32.5 39.3