4 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. 11 of 2 Barco Company Xyan Company Barco Company Company Data from the current year-end balance sheets Data from the current year's income statement Assets Sales $790,000 $ 923,200 Cash $ 21,500 $33,000 Cost of goods sold 587,100 650,500 Accounts receivable, net 39,400 55,400 Interest expense 8,400 10,000 eBook Print 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 $430,040 $540,750 84,640) 134,500 Income tax expense 15,185 25,487 5,300 7,450 Net incone 179,315 229,213 280,000 310,400 Basic earnings per share 4.90 5.85 Cash dividends per share. 3.70 3.98 Beginning-of-year balance sheet data 561,340 $ 95,300 Accounts receivable, net $29,000 $51,200 81,800 101,000 Merchandise inventory 63,600 117,400 180.000 196,000 Total assets 418,000 392,500 107,700 148,450 Common stock, $5 par value 100,000 196,000 Total liabilities and equity $ 430,840 $540,750 Retained earnings 61,585 75,253 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term 1A Current 1A Acid Test 1A Acct Rec Ratio Ratio Turn For both companies compute the current ratio. (a) Company Barco Kyan Numerator: Current Ratio Denominator: Current Ratio = Current ratio = 0 to 1 0 to 1 1A Current Ratio 1A Acid Test Ratio > 1A Current Ratio 1A Acid Test 1A Acct Rec Ratio Turn 1A Invent Turnover Inv 1A Days Sal in 1A Days Sal Uncol 1B short term For both companies compute the acid-test ratio. (b) Company Barco Kyan Acid-Test Ratio Numerator: Denominator: Acid-Test Ratio Acid-test ratio <1a current ratio 1a acct rec turn> 0 to 1 0 to 1 ok For both companies compute the accounts (including notes) receivable turnover. (c) Company Numerator: Accounts Receivable Turnover Denominator: Barco Kyan Accounts Receivable Turnover Accounts receivable turnover Otimes O times < 1A Acid Test Ratio 1A Invent Turnover > N 1A Current Ratio: 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 inventory turnover. ok (d) Company Numerator: t Barco Kyan / Inventory Turnover Denominator: Inventory Turnover Inventory turnover 0 times O times < 1A Acct Rec Turn 1A Days Sal in Inv > 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover Inv 1A-Days Sal in 1A Days Sal Uncol 1B short term For both companies compute the days' sales in inventory. (e) Company Barco Kyan Numerator: Days' Sales in Inventory Denominator: x Days x Days' Sales in Inventory Days' sales in inventory 0 days 0 days <1a invent turnover 1a days sal uncol> 1A Invent Turnover 1A Days Sal in 1A Days Sal 1B short term Inv Uncol 1A Current 1A Acid Test 1A Acct Rec Ratio Ratio Turn For both companies compute the days' sales uncollected. Company Barco Kyan Numerator: Days' Sales Uncollected Denominator: < 1A Days Sal in Inv x Days = Days' Sales Uncollected = Days' sales uncollected x x = 0 days 1B short term > 0 days Complete this question by entering your answers in the tabs below. Ratio iA Current 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent 1A Days Sal in Turnover Invi 1A Days Sal Uncol 1B short term Identify the company you consider to be the better short-term credit risk. Better short-term credit risk <1A term