[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 $ 32,510 $ 37,628 $ 38,420 Accounts receivable, net 90,528 63,242 53,840 Merchandise inventory 116,145 85,292 55,107 Prepaid expenses 10,161 9,584 4,443 Plant assets, net 290,863 269,950 244,190 Total assets $ 540,207 $ 465,696 $ 396,000 Liabilities and Equity Accounts payable $ 134,512 $ 77,129 $ 51,227 Long-term notes payable 99,528 103,897 89,266 Common stock, $10 par value 163,500 162,500 162,500 Retained earnings 142,667 122,170 93,007 Total liabilities and equity $ 540,207 $ 465,696 $ 396,000 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?