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 $ 530,239 $ 129,389 $ 78,795 Long-term notes payable 96,694 Common stock, $10 par value 163,500 Retained earnings 140,656 $ 30,971 89,764 112,861 9,873 286,770 $ 36,568 65,274 84,564 9,311 261,386 $ 457,103 104,082 163,500 110,726 $ 38,489 51,318 54,648 4,233 244,012 $ 392,700 $ 51,318 84,183 163,500 93,699 Total liabilities and equity $ 530,239 $ 457,103 $ 392,700 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?