P$2-47.$ Use Additional Information from $10-$K to Analyze Financial Statements Healthcare Services Group provides management services to the housekeeping, facility maintenance, and dietary departments at nursing homes, retirement complexes, rehabilitation centers, and hospitals. The company reports the following information in Schedule II of a recent fiscal year $($FY$)10-$K$.$

$\backslash$table$[[$SCHEDULE II$-$VALUATION AND QUALIFYING ACCOUNTS$],[$$ thousands,Balance at Beginning of Year,Acquisitions and Dispositions,Bad Debt Expense,WriteOffs,Balance at End of Year$],[$December $31,$ FY$3,$ allowance for doubtful accounts...,$$65,583,$$ $0,$$$31,969,$$$24,088,$$$73,464],[$December $31,$ FY$2,$ allowance for doubtful accounts...,$67,801,0,10,482,12,700,65,583],[$December $31,$ FY$1,$ allowance for doubtful accounts...,$52,393,42,236,9,636,36,464,67,801]]$

Accounts receivable represents the amount customers owe the company for services rendered. The balance in the allowance for doubtful accounts is the company's best estimate of the amount that customers will not repay.

Healthcare Services Group's balance sheet and income statements reported the following.

$\backslash$table$[[$$ millions,FY$3,$FY$2,$FY$1],[$Revenue$,$$$1,690,176,$$$1,641,959,$$$1,760,303],[$Operating income before tax,$53,496,53,769,117,208],[$Total assets,$718,334,777,529,785,031]]$Required

a$.$ Compute the common$-$size allowance for doubtful accounts for each year. Express the allowance as a percentage of that year's total assets. Compare the common$-$size amount across the three years; what do we observe? What is one conclusion analysts might draw from this analysis?

b$.$ On average, the firms in the SP$2-47.$ Use Additional Information from $10-$K to Analyze Financial Statements Healthcare Services Group provides management services to the housekeeping, facility maintenance, and dietary departments at nursing homes, retirement complexes, rehabilitation centers, and hospitals. The company reports the following information in Schedule II of a recent fiscal year $($FY$)10-$K$.$

$\backslash$table$[[$SCHEDULE II$-$VALUATION AND QUALIFYING ACCOUNTS$],[$$ thousands,Balance at Beginning of Year,Acquisitions and Dispositions,Bad Debt Expense,WriteOffs,Balance at End of Year$],[$December $31,$ FY$3,$ allowance for doubtful accounts...,$$65,583,$$ $0,$$$31,969,$$$24,088,$$$73,464],[$December $31,$ FY$2,$ allowance for doubtful accounts...,$67,801,0,10,482,12,700,65,583],[$December $31,$ FY$1,$ allowance for doubtful accounts...,$52,393,42,236,9,636,36,464,67,801]]$

Accounts receivable represents the amount customers owe the company for services rendered. The balance in the allowance for doubtful accounts is the company's best estimate of the amount that customers will not repay.

Healthcare Services Group's balance sheet and income statements reported the following.

$\backslash$table$[[$$ millions,FY$3,$FY$2,$FY$1],[$Revenue$,$$$1,690,176,$$$1,641,959,$$$1,760,303],[$Operating income before tax,$53,496,53,769,117,208],[$Total assets,$718,334,777,529,785,031]]$Required

a$.$ Compute the common$-$size allowance for doubtful accounts for each year. Express the allowance as a percentage of that year's total assets. Compare the common$-$size amount across the three years; what do we observe? What is one conclusion analysts might draw from this analysis?

b$.$ On average, the firms in the S