Required information Skip to question [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Current Year 1 Year Ago 2 Years Ago Assets Cash $ 29,870 $ 35,275 $ 38,256 Accounts receivable, net 90,142 62,991 50,503 Merchandise inventory 109,970 80,741 52,699 Prepaid expenses 9,817 9,543 4,209 Plant assets, net 282,129 261,388 236,933 Total assets $ 521,928 $ 449,938 $ 382,600 Liabilities and Equity Accounts payable $ 131,260 $ 78,321 $ 51,008 Long-term notes payable 98,122 101,416 85,400 Common stock, $10 par value 163,500 162,500 163,500 Retained earnings 129,046 107,701 82,692 Total liabilities and equity $ 521,928 $ 449,938 $ 382,600 For both the current year and one year ago, compute the following ratios: 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?