Required information [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Current Year 1 Year Ago 2 Years Ago Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable $ 587,814 $ 147,829 Long-term notes payable $ 83,926 115,384 Common stock, $10 par value Retained earnings 163,500 167,081 $ 35,028 103,532 126,380 11,392 311,482 109,404 $ 40,133 69,524 96,559 10,748 289,772 $ 506,736 $ 40,166 54,648 58,200 4,463 256,523 $ 414,000 $ 53,009 89,664 162,500 108,827 162,500 144,926 Total liabilities and equity $ 587,814 $ 506,736 $ 414,000 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?