31.+Using the financial statements of ABC-Company and-XYZ, Inc. that are presented-below.[ Part.A:-For both companies for Year 2, compute the.[ 2. + Current ratio 6. Acid-test ratio C. + Accounts receivable turnover d.+ Inventory turnoverf e.+ Days'-sales-in-inventory f. + Days' sales uncollected g. Which company do you consider to be the better short-term credit risk? Explain why. Part B: For both companies for Year 2, compute the: a. + Profit margin ratio b. Return on total-assets C. Return on common-stockholders' equity d.+ Which company do you consider to have better profitability ratios? ABC Company Consolidated Balance Sheets December 311 (in millions) Assetso Current assets:0 ---Cash and cash equivalentso - Accounts receivable, niet of allowance --Inventorieso - Other current assetso -......Total current assetso Property, plant, and equipment, neto Other long-term assetso ----Total-assetso ...........Year-10 $--634.0 $.575.50 2,101.1 1,804.10 1,514.9 1,373.80 -4299 -..--401.30 --4,679.9 --4,154.70 1.620.8 1,614.50 ----670.80 $-6.713.9 -6.440.00 -4132 Liabilities and Stockholders'Equityo $.-205.7 75.4 572.7 1,054.2 ...107.2 2,015.2 ...708.0 Current liabilities: --Current portion of long-term debto ----Notes payable ***Accounts payable Accrued liabilitieso -Income taxes payable -Total current liabilitieso Long term liabilitieso -....-Total liabilitieso Stockholders' equity:9 Common-stocko Contributed capital in excess of par value Unearned stock compensation Accumulated other comprehensive-losso --Retained earningso ---Total-stockholders' equityo Total liabilities and stockholders' equityo $ 55.30 425.20 504.40 765.30 ---...-83.00 1,833.20 .....767.80 --2.601.00 2.8 589.0 (0.6) (239.7) -3.639.2 -3.990.7 $-6.713.9 2.80 538.70 (5.170 (192.4) 3.495.00 -3.839.00 $-6.440.00 ABC-Company Consolidated Statement of Income December 31, -Year-27 (in millions) Revenueso S.10,697.00 Cost of saleso ----6.313.60 Gross profito 4,383.49 Operating expenses -...3.137.60 Operating income 1,245.80 Interest expenses 42.90 Other revenues and expenses .........79.90 Income-before-taxo 1,123.00 Income taxeso .....382.90 Income before effect of accounting changes 740.10 Cumulative effect of accounting change, net oftaxi ----...266.10 Net-incomes S-474.00 XYZ, Inc. Consolidated-Balance Sheets December 310 Year 2 Year-10 Assetso $ 22.20 28.4. Current assets:0 ---Cash-and-cash-equivalentso Accounts receivable, net of allowance - Inventorieso --Other current assetso ...Total current assetso Property, plant, and equipment, neto Other long-term assetso Total assetso ...-4.20 69.59 28-110" 8.00 $-6.60 ..-5.60 12.20 16.3 -2.3 -18.8 ..-2.60 -14.80 Liabilities and Stockholders' Equityo Current liabilities: - Accounts payable Accrued liabilitieso .....Total current liabilities Long term-liabilitieso ------Totalliabilitieso Stockholders' equity: Common-stocko Contributed capital in excess of par value Unearned-stock compensation Accumulated other comprehensivelosso -Treasury stocko --Retained-earningso ......Total-stockholders' equityo .......Total liabilities and stockholders' equity 2.30 17.40 (0.5) (1.3) (5.4) --50.70 --63.20 $-78.00 (6.3) ..55.9 68.7 S-87.3 CON al XYZ, Inc. Consolidated-Statement of Income December 31,-Year-27 _ (in millions) Revenueso Cost of saleso Gross profito Operating expenseso Operating income Interest expense Other revenues and expenseso Income before taxo Income taxeso Net-incomes OOOOOOO