Two companies competing in the same industry are being evaluated by a bank that can lend money to only one of them. Summary information from the financial statements of the two companies follows: Datatech Company Sigma Company Balance Sheet December 31,2018 Assets Cash Accounts receivable, net Notes receivable (trade) Merchandise inventory Prepaid expenses Plant and equipment, net Total assets Liabilities and Stockholders' Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 18,500 36,400 8,100 83,440 4,000 284,000 $434,440 $ 33,000 56,400 6,200 131,500 5,950 303,400 $536,450 $ 60,340 79,800 175,000 119,300 $434,440 $ 92,300 100,000 205,000 139,150 $536,450 Balance Sheet January 1,2018 Accounts receivable, net Notes receivable (trade) Merchandise inventory Total assets Common stock, $5 par value Retained earnings Datatech Company $ 28,800 O 54,600 388,000 175,000 94,300 Sigma Company $ 53,200 O 106,400 372,500 205,000 90,600 Income Statement For the Year Ended December 31,2018 Sales Cost of Goods Sold Interest Expenses Income tax expense Net Income Basic earnings per share Datatech Company $660,000 485,100 6,900 12,800 67,700 1,94 Sigma Company $780,200 532,500 11,000 19,300 105,000 2,56 Required: a. Compute the current ratio, acid-test ratio, accounts (including notes) receivable turnover, inventory turnover, days' sales in inventory, and days' sales in receivables for both companies. Identify the company that you consider to be the better short-term credit risk and explain why. b. Compute the net profit margin, total asset turnover, return on total assets, and return on common stockholders' equity for both companies. Assurning 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 price earnings ratios and dividend yields. Identify which company's stock you would recommend as the better investment and explain why