1 ! Part 1 of 2 7.5 points Skipped Required information [The following information applies to the questions displayed below.] Summary information from the financial statements of two companies competing in the same industry follows. Barco Kyan Company Company Data from the current year-end balance sheets Sales Barco Company Kyan Company Data from the current year's income statement Assets Cash $ 22,000 $ 37,000 Accounts receivable, net 34,400 84,540 $ 780,000 $ 881,200 588,100 650,500 140,500 7,500 309,400 8,400 14,992 17,000 24,327 168,508 189,373 4.43 4.19 3.72 4.01 Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings 5,500 360,000 57,400 $ 506,440 $ 551,800 Cost of goods sold Interest expense Income tax expense Net income Basic earnings per share Cash dividends per share Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory $ 68,340 $ 96,300 $ 32,800 $ 57,200 83,800 103,000 63,600 117,400 226,000 Total assets 438,000 392,500 126,500 Total liabilities and equity $ 506,440 $ 551,800 Common stock, $5 par value Retained earnings 190,000 226,000 137,152 118,379 190,000 164,300 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (d) inventory turnover, (e) days' sales in inventory, and (f) days' sales uncollected. Note: Do not round intermediate calculations. 1b. Identify the company you consider to be the better short-term credit risk. Complete this question by entering your answers in the tabs below. 1b. Identify the company you consider to be the better short-term credit risk. Complete this question by entering your answers in the tabs below. Ratio 1A Current 1A Acid Test 1A Acct Rec Ratio Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term For both companies compute the current ratio. (a) Company Barco Kyan Numerator: 1 Current Ratio Denominator: = Current Ratio = Current ratio = to 1 to 1 1A Current Ratio 1A Acid Test Ratio 1A Invent Turnover Complete this question by entering your answers in the tabs below. Ratio 1A Current 1A Acid Test 1A Acct Rec Ratio Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term For both companies compute the acid-test ratio. (b) Company Barco Kyan Numerator: + + + + + + Acid-Test Ratio Denominator: = Acid-Test Ratio = Acid-test ratio = to 1 to 1 < 1A Current Ratio 1A Acct Rec Turn Complete this question by entering your answers in the tabs below. 1A Current 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent 1A Days Sal in Turnover Inv 1A Days Sal Uncol 1B short term For both companies compute the accounts (including notes) receivable turnover. Accounts Receivable Turnover (c) Company Numerator: I Barco Kyan Denominator: 1A Acid Test Ratio = || II = Accounts Receivable Turnover Accounts receivable turnover times 1A Invent Turnover times Complete this question by entering your answers in the tabs below. 1A Current 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term For both companies compute the inventory turnover. (d) Company Numerator: Barco Kyan I Inventory Turnover Denominator: = II = = Inventory Turnover Inventory turnover times times 1A Acct Rec Turn 1A Days Sal in Inv > Complete this question by entering your answers in the tabs below. Ratio 1A Current 1A Acid Test 1A Acct Rec Ratio Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term For both companies compute the days' sales in inventory. (e) Company Numerator: 1 Days' Sales in Inventory Denominator: Barco Kyan I < 1A Invent Turnover Days' Sales in Inventory = Days' sales in inventory Days = II = II = II 1A Days Sal Uncol > days days Complete this question by entering your answers in the tabs below. 1A Current 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term For both companies compute the days' sales uncollected. (f) Company Numerator: Days' Sales Uncollected Denominator: Barco Kyan Days = Days' Sales Uncollected = Days' sales uncollected = days = days < 1A Days Sal in Inv 1B short term > Complete this question by entering your answers in the tabs below. 1A Current 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent 1A Days Sal in 1A Days Sal Turnover Inv Uncol 1B short term Identify the company you consider to be the better short-term credit risk. Better short-term credit risk < 1A Days Sal Uncol 1B short term >