The following summaries from the income statements and balance sheets of KFC and McDonald's are presented below. Part A: (1.512+4=22 points ) For both companies for Year 2, compute the: (a) Current ratio (b) Acid-test ratio (c) Accounts receivable turnover (d) Inventory turnover (e) Days' sales in inventory (f) Days' sales uncollected Which company do you consider to be the better short-term credit risk? Explain. Consolidated Statement of Income December 31, Year 2 (in millions) Revenues Cost of sales Gross profit Operating expenses Opearting income Interest expense Other revenues and expenses income before tax Income taxes Income before efect of accounting change Cumulative effect of accounting change, net of tax Net Income 106976313.64383.43137.61245.842.979.91123382.9740.1266.1474 McDonald's Consolidated Blance sheets (in millions) December 31, Year 2 December 31, Year I Assets Cash and cash equivalents Accounts receivable, net of allowance Inventories Other current assets Total current assets Property, plant, and equipment, net Other long term assets Total assets Accounts payable Accrued liabilities Total current liabilities Long term liabilities Total liabilities \begin{tabular}{rr} 8.5 & 6.6 \\ \hline 7.8 & 5.6 \\ \hline 16.3 & 12.2 \\ \hline 2.5 & 2.6 \\ \hline 18.8 & 14.8 \end{tabular} \begin{tabular}{lrr} & Equity & 2.3 \\ \hline Common stock & 2.3 & 17.4 \\ Contributed capital in excess of par value & 17.8 & 0.5 \\ Unearned stock compensation & 0.1 & 1.3 \\ Accumulated other comprehensive loss & 0.9 & 5.4 \\ Treasury stock & 6.3 & 50.7 \\ \hline Retained earnings & 55.9 & 63.2 \\ \hline Total equity & 68.7 & 78.5 \\ \hline Total liabilities and stockholders' equity & 87.5 & 208 \end{tabular} McDonald's Consolidated Statement of Income December 31, Year 2 (in millions) Revenues Cost of sales Gross profit Operating expenses Operating income Interest expense Other revenues and expenses Income before tax income taxes Net income 133.587.346.237.38.90.10.39.13.95.2