I need help with #2. For #1 how do I know which company I consider to be better short term credit risk?

Jan 545 Sa Fargo Company Ball Company Fargo Company Ball Company $ 36,500 79,500 82,000 ata from the current year-end balance sheets Assets Cash..... $ 20,000 counts receivable, net .............. 88,700 Merchandise inventory............... 86,800 cald expenses.................... 9.700 Plant assets, net.................... 176,900 Total assets....... .. $382,100 Liabilities and Equity Current liabilities. $ 90,500 Long-term notes payable............. 93,000 Common stock. $5 par value........... Retained earnings..... 65,600 Total liabilities and equity.............. $382.100 Data from the current year's income statement Sales. Cost of goods sold................. Interest expense Income tax expense ................ Net Income Basic earnings per share.............. 10,100 252,300 $460.400 $393.600 290,600 5,900 5.700 33.850 1.27 $667,500 480,000 12,300 12,300 61,700 2.19 $ 97,000 93.300 141.000 129,100 $460.400 Beginning-of-year balance sheet data Accounts receivable, net............. Merchandise inventory.............. Total assets ....................... Common stack. $5 par value .......... Retained earnings $ 72,200 105,100 383.400 133.000 49,100 $ 73,300 80,500 443,000 141.000 109.700 Check (1) Fargo: Accounts receivable turnover 49 Inventory turnover 30 Required 1. For both companies compute the (a) current ratio, (b) acid-test ratio. (c) accounts receivable turn- over. (d) inventory turnover, (e) days' sales in inventory, and ( 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. (b) total asset turnover. (c) return on total assets, and (d) return on common stockholders' 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. (2) Boll: Profit margin, 9.2%. PE. 114