Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the company's financial statements for the 2 most recent years. Kepler Company Comparative Balance Sheets 'This Year Last Year Assets Current assets: Cash $ 50,000 $ 100,000 Accounts rececivable, net 300,000 150,000 Inventory Prepaid expenses 600,000 400,000 30,000 $ 680,000 25,000 Total current assets $ 975,000 Property and cquipment, net Total assets 125,000 $1,100,000 150,000 $ 830,000 Liabilities and Stockholders' Equity Current liabilities: $ 400,000 Accounts payable Short-term notes payable 200,000 $ 600,000 $ 290,000 60,000 $ 350,000 Total current liabilities Long term bonds payable, 12% Total liabilities 100,000 150,000 $ 700,000 $ 500,000 Stockholders' equity: Common stock (100,000 shares) Retained earnings Total liabilities and stockholders' cquity 200,000 200,000 200,000 $1,100,000 130,000 $ 830,000 Kepler Company Comparative Income Statements This Year Last Year Sales Less: Cost of goods sokld Gross margin Less: Selling and administrative cxpenses Operating income Less: Interest expense Income before taxes $950,000 $900,000 500,000 490,000 $450,000 $410,000 275,000 260,000 $175,000 $150,000 12,000 $163,000 18,000 $132,000 52,800 $ 79,200 Less: Income taxes 65,200 $ 97,800 27,800 S 70,000 Net income Less: Dividends 19,200 $ 60,000 Net income, retaincd Refer to the information for Kepler Company above. Required: Note: Round all percentages to one decimal place. 1. Compute the percentage change for each item in the balance sheet and income statement. 2. CONCEPTUAL CONNECTION Comment on any significant trends.