QUESTION 4) (10 pts) ABC Company and XYZ Company are operating in the same sector. They are also similar in terms of their size. Using the below information please evaluate both companies' liquidity and explain which is better? (300 words) ABC XYZ 2018 2017 2017 1.7 2.0 Current ratio ..... Acid-test ratio Accounts receivable turnover Inventory turnover. Working capital 1.6 0.9 29.5 23.2 $60,000 1.0 24.2 20.9 $48,000 2016 2018 3.1 1.1 2.7 28.2 15.4 16.1 13.5 $42,000 $121,000 2.6 2.4 14.2 12.0 $93,000 2016 1.8 1.5 15.0 11.6 $68,000 QUESTION 5) (20 pts) Freshman Company and Graduates Company are operating in the same sector. Freshman was established in 2016 and Graduates in 2010. Both company's cost of debt is 5% as of December 31, 2018 Freshmen Inc. 2017 2016 2.7 1.4 Graduates Inc. 2018 2017 1.6 5.5% 2.7% 2.9% $200,000 $160,000 2018 Total asset turnover ....... 3.0 Return on total assets 8.9% Profit margin 2.3% Sales .... $400,000 1.1 2016 2.9 8.7% 2.2% $386,000 9.5% 2.4% $370,000 5.8% 5.2% 2.8% $100,000 a) Comment on the asset efficiency and profitability of both companies and indicate which is better. (10 pts, 150 words) (Note: Do not tell me only this increased that decreased, I want a nice paragraph) b) Comment on the success of debt management and riskiness of both companies.(10 pts, 150 words)