Presented below are financial statements (except cash flows) for two not-for-profit organizations. Neither organization has any permanently restricted net assets. ABC Not-for-Profit Temporarily Unrestricted Restricted XYZ Not-for-Profit Temporarily Unrestricted Restricted $5,604,000 3,350,000 $2,268,000 3,245,000 $ 768,000 97,800 $1,026,800 22,000 468,000 9,444,000 (468,000) 397,800 386,000 5,899,000 (386,000) 640,800 Statement of Activities Revenues Program service revenue Contribution revenues Grant revenue Net gains on endowment investments Net assets released from restriction Satisfaction of program restrictions Total revenues Expenses Education program expenses Research program expense Total program service expenses Fund-raising Administration Total supporting service expenses Total expenses Increase in net assets Net assets January 1 Net assets December 31 5,648,000 1,274,000 6,922,000 482,000 668,000 1,150,000 8,072,000 1,372,000 4,226,000 $5,598,000 1,568,000 2,274,000 3,842,000 367,000 1,238,000 1,605,000 5,447,000 452,000 1,060,000 $1,512,000 397,800 768,000 $1,165,800 640,800 338,000 $ 978,800 ABC Not-for-Profit XYZ Not-for-Profit $ $ 235,600 274,000 36,500 444,000 990,100 365,000 103,500 195,000 190,300 853,800 266,800 2,635,000 3,179,500 6,081,300 $7,071,400 1,786,000 1,786,000 $2,639,800 Statement of Net Assets Current assets Cash Short-term cash equivalents Supplies inventories Receivables Total current assets Noncurrent assets Noncurrent pledges receivable Endowment investments Land, buildings, and equipment (net) Total noncurrent assets Total assets Current liabilities Accounts payable Total current liabilities Noncurrent liabilities Notes payable Total noncurrent liabilities Total liabilities Net Assets Unrestricted Donor restricted for purpose Donor restricted for endowment Total net assets Total liabilities and net assets $ $ 27,500 27,500 133,500 133,500 183,000 183,000 210,500 133,500 2,409,500 96,800 4,070,000 156,800 2,635,000 6,861,800 $7,072,300 2,506,300 $2,639,800 Required: a. Calculate the following ratios (assume depreciation expense is $795,000 for both organizations and is allocated among program and supporting expenses): Program expense Fund-raising efficiency. Days cash on hand. . Working capital (expressed in days). b. For each ratio, which of the two organizations has the stronger ratio. (Assume 365 days in a year. Do not round intermediate calculations. Round "Program expense" answers to 1 decimal place and "Fund-raising efficiency" answers to 3 decimal places and "Days cash on hand", "Working capital" answers to nearest whole number.) ABC XYZ Stronger Ratio Ratios Program expense Fund-raising efficiency Days cash on hand Working capital (days) days days days days Presented below are financial statements (except cash flows) for two not-for-profit organizations. Neither organization has any permanently restricted net assets. ABC Not-for-Profit Temporarily Unrestricted Restricted XYZ Not-for-Profit Temporarily Unrestricted Restricted $5,604,000 3,350,000 $2,268,000 3,245,000 $ 768,000 97,800 $1,026,800 22,000 468,000 9,444,000 (468,000) 397,800 386,000 5,899,000 (386,000) 640,800 Statement of Activities Revenues Program service revenue Contribution revenues Grant revenue Net gains on endowment investments Net assets released from restriction Satisfaction of program restrictions Total revenues Expenses Education program expenses Research program expense Total program service expenses Fund-raising Administration Total supporting service expenses Total expenses Increase in net assets Net assets January 1 Net assets December 31 5,648,000 1,274,000 6,922,000 482,000 668,000 1,150,000 8,072,000 1,372,000 4,226,000 $5,598,000 1,568,000 2,274,000 3,842,000 367,000 1,238,000 1,605,000 5,447,000 452,000 1,060,000 $1,512,000 397,800 768,000 $1,165,800 640,800 338,000 $ 978,800 ABC Not-for-Profit XYZ Not-for-Profit $ $ 235,600 274,000 36,500 444,000 990,100 365,000 103,500 195,000 190,300 853,800 266,800 2,635,000 3,179,500 6,081,300 $7,071,400 1,786,000 1,786,000 $2,639,800 Statement of Net Assets Current assets Cash Short-term cash equivalents Supplies inventories Receivables Total current assets Noncurrent assets Noncurrent pledges receivable Endowment investments Land, buildings, and equipment (net) Total noncurrent assets Total assets Current liabilities Accounts payable Total current liabilities Noncurrent liabilities Notes payable Total noncurrent liabilities Total liabilities Net Assets Unrestricted Donor restricted for purpose Donor restricted for endowment Total net assets Total liabilities and net assets $ $ 27,500 27,500 133,500 133,500 183,000 183,000 210,500 133,500 2,409,500 96,800 4,070,000 156,800 2,635,000 6,861,800 $7,072,300 2,506,300 $2,639,800 Required: a. Calculate the following ratios (assume depreciation expense is $795,000 for both organizations and is allocated among program and supporting expenses): Program expense Fund-raising efficiency. Days cash on hand. . Working capital (expressed in days). b. For each ratio, which of the two organizations has the stronger ratio. (Assume 365 days in a year. Do not round intermediate calculations. Round "Program expense" answers to 1 decimal place and "Fund-raising efficiency" answers to 3 decimal places and "Days cash on hand", "Working capital" answers to nearest whole number.) ABC XYZ Stronger Ratio Ratios Program expense Fund-raising efficiency Days cash on hand Working capital (days) days days days days