CASE 1-3 Comparattive Analysis: Credit and Equity Analysis Two companies competing in the same industry are being evaluated by a bank that can lend money to only one of them Summary information from the financial statements of the two companies follows: Datatech Sigma Company Company Datatech Sigma Company Company Data from the curent year's income statement Data from the current year-end balance sheet $660,000 $780,200 Sales Assets $18,50033,000 Cash Cost of goods sold Interest expense 485,100 532,500 11,000 Accounts receivable, net Notes receivable (trade) 36,400 56,400 6,900 12,800 6,200 Income tax expense 8,100 19,300 Merchandise inventory Prepaid expenses Plant and equipment, net 83,440 131,500 5,950 Net income 67,770 105,000 2.56 Basic earnings per share.... 4,000 1.94 284,000 303,400 $434,440 $536,450 Total assets Sigma Company Company Datatech Datatech Sigma Company Company Page 62 Beginning-of-year data Liabilities and Stockholders' Equity Accounts receivable, net Notes receivable (trade). 28,800 53,200 $ 60,340 $92,300 100,000 Current liabilities 0 0 Long-term notes payable Common stock, $5 par value 79,800 Merchandise inventory 106,400 54,600 175,000 205,000 388,000 Total assets 372,500 205,000 90,600 Retained eamings 119,300 139,150 Common stock, $5 par value Retained earnings 175,000 Tot al liabilities and equity $434,440 $536,450 94,300 CHECK Accounts receivable turnover, Sigma, 13.5 times Required: Compute the current ratio, acid-test ratio, accounts (including notes) receivable turnover, inventory turnover, days' sales in inventory, and days' sales in receivables for both companies. Identify the company that you consider to be the better short-term credit risk and explain why a