Summary information from the financial statements of two companies competing in the same industry follows.

Required
1. For both companies compute the
(a) Current ratio,
(b) Acid- test ratio,
(c) Accounts ( including notes) receivable turnover,
(d) Inventory turnover,
(e) Days’ sales in inventory, and
(f) Days’ sales uncollected.
Identify the company you consider to be the better short- term credit risk and explain why. Round to one decimal place.
2. For both companies compute the
(a) Profit margin ratio,
(b) Total asset turnover,
(c) Return on total assets,
(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
(f) Dividend yields. Round to one decimal place, except for part b round to two decimals.
Identify which company’s stock you would recommend as the better investment and explainwhy.

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Fargo Company Company Ball Data from the current year-end balance sheets Assets Current notes receivable (trade) Merchandise inventory Prepaid expenses.. 77.100 11.600 86,800 9,700 70,500 9,000 82,000 0,100 . . 76.90052300 . $382.100 $460.400 Total assets Liabilities and Equity 93,300 141,000 129,100 $382.100 460400 Common stock $ pa vau 133,000 65.600 Retained earnings Total liabilities and equity .. Data from the current year's income statement Sales Cost of goods sold Interest expense 290,600 40 5,900 5.700 33,850 1.27 480,000 2.300 12,300 61,700 Beginning-of-year balance sheet data Current notes receivable (trade) 0 80,500 383,400 443,000 133,000 41,000 49,100 09,700 105,100 Common stock. $5 par value Retained earnings...