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 $ 580,046 Accounts payable $ 147,320 Long-term notes payable Common stock, $10 par value Retained earnings $ 82,817 113,859 163,500 139,864 $ 34,907 96,212 122,216 11,241 315,470 110,139 162,500 160,087 $ 39,603 69,306 89,732 10,291 291,108 $ 500,040 $ 40,428 56,104 57,988 4,446 257,734 $ 416,700 $ 56,655 92,091 162,500 105,454 Total liabilities and equity $ 580,046 $ 500,040 $ 416,700 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?