Barco Company Kyan Company Summary information from the financial statements of two companies competing in the same industry follows. Kyan Barco Company Company Data from the current year-end Data from the current year's balance sheets Assets Cash $ 20,500 Accounts receivable, net 35,400 84,740 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 Total liabilities and equity 5,700 310,000 $ 456,340 $ 540,350 $ 62,340 $ 100,300 80,800 200,000 113,200 income statement Sales 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 Total assets 99,000 196,000 145,050 Common stock, $5 par value Retained earnings $ 456,340 $ 540,350 $ 800,000 $ 928,200 $ 36,000 593,100 632,500 50,400 7,600 12,000 136,500 15,377 25,625 7,050 183,923 258,075 310,400 4.60 6.58 3.77 3.94 $ 31,800 $ 57,200 57,600 109,400 448,000 412,500 200,000 196,000 80,077 41,423 Problem 13-5A (Algo) Part 1 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. (Do not round intermediate calculations.) 1b. Identify the company you consider to be the better short-term credit risk. [The following information applies to the questions displayed below.] Summary information from the financial statements of two companies competing in the same industry follows. Sales Cost of goods sold Barco Company Kyan Company Barco Company Kyan Company Data from the current year-end Data from the current year's balance sheets income statement Assets $ 800,000 $ 928,200 Cash $ 20,500 $ 36,000 Accounts receivable, net 35,400 50,400 136,500 7,050 310,400 593,100 632,500 7,600 12,000 15,377 25,625 183,923 258,075 4.60 6.58 3.77 3.94 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 Total liabilities and equity 84,740 5,700 310,000 $ 456,340 $ 540,350 $ 62,340 $ 100,300 80,800 200,000 113,200 99,000 196,000 145,050 $ 456,340 $ 540,350 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 Total assets Common stock, $5 par value Retained earnings $ 31,800 $ 57,200 57,600 109,400 448,000 412,500 200,000 196,000 80,077 41,423 Problem 13-5A (Algo) Part 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratios and (5) dividend yields. 2b. Identify which company's stock you would recommend as the better investment