Answer:
Simon Company's 
Balance Sheets at December 31L
                                           Current Yr   %      1 Yr Ago     %     2 Yrs Ago   %
Assets 
Cash                                    $ 33,817      6     $ 40,739    8     $ 42,420    10
Accounts receivable, net    100,012      17        69,175   14         53,814     13 Merchandise inventory      128,260     22        91,410    18       59,663     14
Prepaid expenses                  11,001       2        10,482     2          4,576      1
Plant assets, net                   311,773    53     292,386   57     255,527    61
Total assets                    $ 584,863    100  $ 504,192  100  $ 416,000  100
Liabilities and Equity
Accounts payable           $ 141,262      24    $ 85,208    17     $ 56,010    13
Long-term notes payable 108,855      19        118,283    23       91,936    22 Common stock, 
         $10 par value           163,500      28       163,500   32     163,500    39 Retained earnings             171,246      29        137,201   27      104,554    25
Total liabilities & equity$ 584,863    100    $ 504,192  100 $ 416,000   100
2. Assuming annual sales have not changed in the last three years, the change in accounts receivable as a percentage of total assets is favorable.  It is always better to maintain low accounts receivable, thereby reducing credit risk exposures.
3. Assuming annual sales have not changed in the last three years, the change in merchandise inventory as a percentage of total assets is favorable.   Less inventory means that working capital is not being tied down to inventory.
Explanation:
Common-size percentages are used in analyzing the balance sheet.   The calculations set each line item as a percent of the total assets.