Summary information from the financial statements of two companies competing in the same industry follows. Fargo Ball Company Company Fargo Company Ball Company Data from the current year-end balance sheets Data from the current year's income statement Assets Sales... $393,600 $667,500 Cash..... $ 20,000 $ 36,500 Cost of goods sold.. 290,600 480,000 Accounts receivable, net. Merchandise inventory. 88,700 79,500 Interest expense... 5,900 12.300 86,800 82.000 Income tax expense 5,700 12,300 Propaid expenses.. Plant assets, net. Total assets.... 9,700 10,100 Not income 33,850 61,700 176,900 252,300 Basic earnings per share... 1.27 2.19 $382,100 $460,400 Liabilities and Equity Current liabilities..... Long-term notes payable. Beginning-of-year balance sheet data $ 90,500 $ 97,000 Accounts receivable, net.... $ 72,200 $ 73,300 93,000 93,300 Merchandise inventory.. 105,100 80,500 Common stock, $5 par value.. Retained earnings.. Total liabilities and equity.. 133,000 141,000 Total assets 383,400 443,000 65,600 129,100 Common stock, $5 par value 133,000 141,000 $382,100 $460,400 Retained earnings.. 49,100 109,700 c Required 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 place. Identify the company you consider to be the better short-term credit risk and explain why. 2. For both companies compute the (a) profit margin ratio, (6) 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 each company's stock can be purchased at $25 per share, compute their (e) price-earnings ratios and (f) dividend yields. Round to one decimal place; for part b, round to two decimals. Identify which company's stock you would recommend as the better investment and explain why.