Presented below are financial statements (except cash flows) for two not-for-profit organizations. Statement of Activities Revenues Program service revenue 1 Contribution revenues ABC Not-for-Profit Unrestricted $ 5,595,000 3,327,500 Donor-Restricted $ 750,000 96,000 XYZ Not-for-Profit Unrestricted Donor- Restricted $ 2,250,000 3,200,000 $ 1,025,000 Grant revenue Net gains on endowment investments Satisfaction of program restrictions 17,500 Net assets released from restriction 450,000 (450,000) 377,000 Total revenues 9,390,000 396,000 5,827,000 Expenses Education program expenses 5,525,000 1,680,000 Research program expense 1,350,000 2,232,000 Total program service expenses 6,875,000 3,912,000 Fund-raising 550,000 Administration 650,000 Total supporting service expenses 1,200,000 Total expenses Increase in net assets 8,075,000 1,315,000 Net assets, January, 1 4,208,000 | I Net assets, December, 31 Statement of Net Assets Current assets Cash Short-term cash equivalents Supplies inventories Receivables Total current assets Noncurrent assets $ 5,523,000 $ 1,155,000 396,000 759,000 412,000 990,000 1,402,000 5,314,000 513,000 1,037,500 $ 1,550,500 ABC Not-for-Profit XYZ Not-for-Profit $ 205,000 Noncurrent pledges receivable 1 1 Total assets Endowment investments Total noncurrent assets Current liabilities Accounts payable Land, buildings, and equipment (net) $ 6,879,500 $ 23,000 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. 23,000 178,500 178,500 201,500 129,000 5,523,000 1,550,500 155,000 265,000 32,000 439,500 941,500 173,000 2,590,000 3,175,000 5,938,000 $ 356,000 99,000 150,000 188,500 793,500 86,000 1,768,000 1,854,000 $ 2,647,500 $ 129,000 129,000 1,000,000 6,678,000 $ 6,879,500 0 968,000 2,518,500 $ 2,647,500 (377,000) 648,000 648,000 320,000 $ 968,000 Required: a. Calculate the following ratios (assume depreciation expense is $480,000 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. Note: 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 85.1 % 73.6 % ABC Not-for-Profit Fund-raising efficiency 6.050 7.770 XYZ Not-for-Profit Working capital (days) 42 days 46 days XYZ Not-for-Profit Days cash on hand 9 days 24 days XYZ Not-for-Profit