Required information Skip to question [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow.

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?

For both the current year and one year ago, compute the following ratios: SIMON COMPANY Common-Size Comparative Balance Sheets December 31 \begin{tabular}{|l|l|l} \hline 2. Change in accounts receivable \\ \hline 3. Change in merchandise inventory \\ \hline \end{tabular} unfavorable development. favorable development