Two different species of bacteria are examined. scientists find that species x always produces co2 and h2o during cellular respiration. species y always produces ethyl alcohol and co2 . which conclusion can be made from these observations?

Species X is aerobic and Species Y is anaerobic.  
You need to understand how cells produce ATP, starting from glucose. Both aerobic and anaerobic metabolism start off the same. They take 1 glucose molecule and glycolysis produce 2 ATP molecules and pyruvate. After this point, the metabolism diverges.  
For the anaerobic route, the pyruvate is fermented into either lactic acid or ethanol depending upon the organism. For the fermentation that results in ethanol, CO2 is released.  
For the aerobic route, the pyruvate then undergoes the Krebs cycle producing another 2 ATP molecules. And finally the resulting products go through the electron transport chain for an additional production of 32 to 34 ATP molecules. So aerobic respiration produces between 36 to 38 ATP molecules per glucose molecule.  
Since both metabolic pathways start the same, and aerobic metabolism is more advanced, we can make an assumption that both species of bacteria at some point had a common ancestor and that species X evolved after species Y.