Simon Company's year-end balance sheets follow.

At December 31	Current Year	1 Year Ago	2 Years Ago
Assets
Cash	$ 36,021	$ 41,280	$ 41,719
Accounts receivable, net	99,283	73,685	56,192
Merchandise inventory	129,977	98,324	61,060
Prepaid expenses	11,486	11,161	4,777
Plant assets, net	321,793	291,550	266,252
Total assets	$ 598,560	$ 516,000	$ 430,000
Liabilities and Equity
Accounts payable	$ 147,551	$ 88,076	$ 55,625
Long-term notes payable	115,905	122,240	94,080
Common stock, $10 par value	163,500	162,500	163,500
Retained earnings	171,604	143,184	116,795
Total liabilities and equity	$ 598,560	$ 516,000	$ 430,000

For both the current year and one year ago, compute the following ratios:

Exercise 13-6 (Algo) Common-size percents LO P2

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?