Presented below are financial statements (except cash flows) for two not-for-profit organizations. Neither organization has any permanently restricted net assets. 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 ABC Not-for-Profit XYZ Not-for-Profit Unrestricted $ 6,595,000 3,427,500 Temporarily Restricted Unrestricted Temporarily Restricted $ 760,000 $2,350,000 3,300,000 106,000 $1,035,000 18,500 470,000 10,511,000 (470,000) 396,000 677,000 6,327,000 (677,000) 358,000 6,621,000 1,569,000 1,266,000 2,756,000 7,887,000 4,325,000 556,000 660,000 406,000 1,239,000 1,216,000 1,645,000 9,103,000 5,970,000 1,408,000 4,218,000 $ 5,626,000 396,000 769,000 $1,165,000 357,000 358,000 1,047,500 $1,404,500 330,000 $ 688,000 Statement of Net Assets Current assets Cash Short-term cash equivalents Supplies inventories Receivables Total current assets ABC Not-for-Profit XYZ Not-for-Profit $ 215,000 $ 366,000 275,000 100,000 42,000 160,000 449,500 198,500 981,500 824,500 Noncurrent assets Noncurrent pledges receivable 275,000 Endowment investments 2,690,000 Land, buildings, and equipment (net) 3,185,000 1,778,000 Total noncurrent assets 6,150,000 1,778,000 Total assets $7,131,500 $2,602,500 Current liabilities Accounts payable $ 33,000 Total current liabilities Noncurrent liabilities 33,000 $ 139,000 139,000 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 188,500 188,500 221,500 139,000 4,035,000 2,374,500 165,000 89,000 2,690,000 0 6,890,000 $7,111,500 2,463,500 $2,602,500 Required: a. Calculate the following ratios (assume depreciation expense is $760,000 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). Required: a. Calculate the following ratios (assume depreciation expense is $760,000 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.) Answer is complete but not entirely correct. Ratios ABC XYZ Stronger Ratio Program expense 86.6 % Fund-raising efficiency 0.133 72.4 % 0.123 ABC Not-for-Profit XYZ Not-for-Profit Days cash on hand 38 days 42 days XYZ Not-for-Profit Working capital (days) 22 days 41 days ABC Not-for-Profit