Chapter 17 Lab-summary information for the financial statements of two companies competing in the same industr follows: Data from the current year end balance sheet: Data from the current year's income statement: Fargo Ball Fargo B ASSETS Sales 393,600 667 Cash 20,000 36,500 Cost of Goods Sold 290,600 480 Accounts receivable, net 88,700 79,500 Gross profit 103,000 187 Inventory 86,800 82,000 Opera g expenses 57,550 101, Prepaid expenses Plant assets, net TOTAL ASSETS 9,700 10,100 176,900 252,300 382,100 460,400 Interest Expense 5,900 12, Income tax expense 5,700 12, Net Income 33,850 61, Basic earnings per share $ 1.27 $ 2 LIABILITIES AND EQUITY Current liabilities 90,500 97,000 Long-term notes payable 93,000 93,300 Beginning of year balance sheet data: Accounts receivable, net 72,200 73,3 Common stock, $5 par value 133,000 141,000 Inventory 105,100 80,5 Retained Earnings 65,600 129,100 Total assets 383,400 443,00 TOTAL LIABILITIES AND EQUITY 382,100 460,400 Common stock, $5 par value Retained Earnings 133,000 141,00 49,100 109,70 Requirements: 1. For both companies compute the (a) current ratio, (b) acid test ratio, (c) accounts receivable turnover, (d) inventory turnover, (e) days' sales in inventory and (f) days' sales uncollected. Round to one decimal point and show all work. Identif the company you consider the better short-term credit risk and explain why. 2. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets and (d) return on equity. Assuming that each company paid cash dividends of $1.50 per share and that each company's stock can be purchased for $25 per share, compute their (e) price to earnings ratios and (f) dividend yields. Round to one decimal point and show all work. Indentify which company's stock you would recommend as the better investment and explain why.