3: Financial information for Crisco Company and Silas Company, both in the same type of industry, are shown below. Chlsco Silas Company Company Crisco Silas Company Company $668,500 481,000 Data from the current yearend balance sheets Assets Cash $ 21,000 Accounts receivable, net ............. 78,100 Current notes receivable (trade) .... 12,600 Merchandise Inventory .... .... 87,800 Prepaid expenses ....... . 10,700 Plant assets, net ...... ... .. 177.900 Total assets ......... $388,100 13,300 Data from the current year's income statement Sales $394,600 Cost of goods sold ....... 291,600 Interest expense ........ 6,900 Income tax expense ............... Net Income ........ 34,850 Basic earnings per share ............ 1.16 $37,500 71,500 10,000 83,000 11.100 253,300 $466,400 6.700 14,300 62,700 1.84 $ 73,200 $ 74,3003 02 Liabilities and Equity Current liabilities ..... Long-term notes payable ........ Common stock, 55 par value ......... Retained earnings ... . Total liabilities and equity ........... $100,500 85,650 150,000 51,950 $388.100 $ 98,000 62.400 170,000 136,000 $466,400 Beginning-of-year balance sheet data Accounts receivable, net.............. Current notes receivable (trade) ........ Merchandise inventory ... Total assets ........ Common stock, $5 par value .... Retained earnings ......... 106,100 384,400 150,000 50.100 81,500 444,000 170,000 110,700 REQUIRED: 1. For both companies compute the current ratio, acid test ratio, accounts (including notes) receivable turnover, inventory turnover, days' sales in inventory, and days's sales uncollected. Identify the company you consider to be the better short-term credit risk and explain why. 2. For both companies compute the profit margin ratio, total asset turnover, return on total assets and return on common stockholders equity. Assume that each company paid dividends of $1.10 per share and each company's stock can be purchased for $25 per share. Compute the price-earnings ratio and dividend yields for each company. Which company's stock do you recommend as the better investment and explain your decision. The following calendar year-end information is taken from the lecember 31, 2009 adjusted trial halance an