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 XYZ Not-for-profit Statement of Activities Temporarily Temporary Unrestricted Restricted Unrestricted Revenues Restricted Program service revenue $ 7,495,000 $2,440,000 Contribution revenues 3,517,500 $ 769,000 Grant revenue 3,390,000 115,000 Net gains on endowment investments $1,044,000 19,400 Net assets released from restriction Satisfaction of program restrictions 488,800 (488,000) 947,000 Total revenues (947,080) 11,519,900 396,000 Expenses 6,777,000 97,000 Education program expenses 7,521,000 1,578,000 Research program expense 1,275,000 3,206,000 Total program service expenses 8,796,000 4,784,000 Fund-raising 646,000 451,000 Administration 669,000 1,248,000 Total supporting servic expenses 1,315,000 1,699,000 Total expenses 10, 111,000 Increase in net assets 6,483,000 1,408,900 396,900 294,000 97,000 Net assets January 1 4,227,000 278,000 1,056,500 339,000 Net assets December 31 55,635,900 $1,174,000 $1,350, 500 $ 436,000 ABC Not-for-profit XYZ Not-for-profit Statenent 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 $ 224,000 284,000 51,080 458,500 1,017,500 $375,000 100,900 169,000 207,500 852,400 284,000 2,780,000 3, 194,000 6,258,000 1,787,080 1,787,800 ABC Not-for-Profit XYZ Not-for-profit $ 224,000 284,000 51,000 458,500 1,017,500 $375,000 100,900 169,000 207,500 852,400 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 284,000 2,780,000 3, 194,000 6,258,000 $7,275,500 1,787.000 1,787,000 $2,639, 400 $ 42,000 42,000 $ 148,000 148,000 197,500 197,500 239,500 148,000 2,383,500 107,900 4,044,000 174,000 2,780,000 6,998,000 $7,237,500 2,491,400 $2,639, 400 Required: a. Calculate the following ratios (assume depreciation expense is $769,000 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.) Ratios Program expense Fund-raising officiency Days cash on hand Working capital (days) ABC 87,01% 0.151 9 days 1 days XYZ 73.8% 0.133 24 days Stronger Ratio 'ABC Not-for-Profit XYZ Not-for-Profit XYZ Not-for-Profit ABC Not-for-Profit 1 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 Ratios Program expense Fundraising efficiency Days cash on hand Working capital (days) Answer is complete but not entirely correct. XYZ Stronger Ratio 87.0% 73.8% ABC Not-for-Profit 0.151 0.133 XYZ Not-for-Profit 9 days 24 days XYZ Not-for-Pro 1 days 1 days ABC Not for Profit >