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 Revenues Program service revenue Contribution revenues Grant revenue Net gains on endowment investments Unrestricted Temporarily Restricted Unrestricted Temporarily Restricted $6,095,000 3,377,500 $ 755,000 101,000 $2,300,000 3,250,000 $1,030,000 18,000 Net assets released from restriction Satisfaction of program restrictions Total revenues Expenses Education program expenses 460,000 9,950,500 (460,000) 396,000 527,000 6,077,000 (527,000) 503,000 6,121,000 1,564,000 Research program expense 1,261,000 2,506,000 Total program service expenses 7,382,000 4,070,000 Fund-raising Administration 506,000 381,000 655,000 1,234,000 Total supporting service expenses 1,161,000 1,615,000 Total expenses 8,543,000 5,685,000 Increase in net assets 1,407,500 Net assets January 1 Net assets December 31 4,213,000 $5,620,500 396,000 764,000 $1,160,000 392,000 1,042,500 $1,434,500 503,000 325,000 $ 828,000 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 ABC Not-for-Profit $ 210,000 270,000 37,000 XYZ Not-for-Profit $ 361,000 99,500 155,000 444,500 961,500 193,500 809,000 270,000 2,640,000 3,180,000 1,773,000 6,090,000 1,773,000 $7,051,500 $2,582,000 $ 28,000 28,000 $ 134,000 134,000 183,500 Total noncurrent liabilities 183,500 Total liabilities 211,500 134,000 Net Assets Unrestricted 4,030,000 2,369,500 Donor restricted for purpose 160,000 78,500 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 37,000 155,000 444,500 193,500 961,500 809,000 270,000 2,640,000 3,180,000 1,773,000 6,090,000 $7,051,500 $ 28,000 28,000 183,500 1,773,000 $2,582,000 $ 134,000 134,000 183,500 211,500 134,000 4,030,000 2,369,500 160,000 78,500 2,640,000 0 6,830,000 $7,041,500 2,448,000 $2,582,000 Required: a. Calculate the following ratios (assume depreciation expense is $755,000 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 ABC XYZ Stronger Ratio % % Fund-raising efficiency Days cash on hand days days Working capital (days) days days