"ABC CompanyConsolidated Statement of IncomeDecember 31, Year 2(in millions)" Revenues $ 10,697.0 Cost of sales 6,313.6 Gross profit 4,383.4 Operating expenses 3,137.6 Operating income 1,245.8 Interest expense 42.9 Other revenues and expenses 79.9 Income before tax 1,123.0 Income taxes 382.9 Income before effect of accounting change 740.1 Cumulative effect of accounting change, net of tax 266.1 Net income $ 474.0 "XYZ, Inc.Consolidated Balance SheetsDecember 31" Year 2 Year 1Assets Current assets: Cash and cash equivalents $ 34.5 $ 22.2 Accounts receivable, net of allowance 15.5 14.7 Inventories 27.2 28.4 Other current assets 3.5 4.2 Total current assets 80.7 69.5Property, plant, and equipment, net 5.7 7.0Other long-term assets 1.1 1.5 Total assets $ 87.5 $ 78.0 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 8.5 $ 6.6 Accrued liabilities 7.8 5.6 Total current liabilities 16.3 12.2Long term liabilities 2.5 2.6 Total liabilities 18.8 14.8Stockholders' equity: Common stock 2.3 2.3 Contributed capital in excess of par value 17.8 17.4 Unearned stock compensation (0.1) (0.5) Accumulated other comprehensive loss (0.9) (1.3) Treasury stock (6.3) (5.4) Retained earnings 55.9 50.7 Total stockholders' equity 68.7 63.2 Total liabilities and stockholders' equity $ 87.5 $ 78.0

31. Using the nancial statements of ABC Company and XYZ, Inc. that are presented below. Part A: For both companies for Year 2, compute the: Page 14 a. Current ratio b. Acid-test ratio c. Accounts receivable turnover d. Inventory turnover 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. Prot margin ratio b. Return on total assets c. Return on common stockholders' equity d. Which company do you consider to have better protability ratios