ENT ANALYSIS Help Required Information Problem 13-5A Comparative ratio analysis LO P3 [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 Barco Kyan Company Company Company Company Data from the current year-end balance sheets Data from the current year's income statement Assets Sales $ 770,000 $890, 200 Cash $ 19,500 $32,000 Cost of goods sold 590,100 642,500 Accounts receivable, net 36, 400 51,400 Interest expense 9,300 17,000 Merchandise inventory 84,840 134,500 Income tax expense 14,800 24,576 Prepaid expenses 5,300 1,450 Net income 155,800 206,124 Plant assets, net 320,000 309,400 Basic earnings per share 4.33 5.00 Total assets $466,040 $534,750 Cash dividends per share 3.77 3.95 Liabilities and Equity Current liabilities Long-term notes payable Common stock, 5 par value Retained earnings Total liabilities and equity $ 60,340 $ 92,300 B0, 800 101,000 180,000 206,000 144,900 135,450 $466,040 $534,750 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Potal assets Common stock, $5 par value Retained earnings $ 27,800 $ 58,200 55,600 109,400 458,000 412.500 180,000 206,000 124,820 92,066 Problem 13-5A Part 1 Required: 1a. For both companies compute the (a) current ratio. (b) acid-test ratio. (c) accounts receivable turnover (inventory turnover. (e) days Sales in inventory, and to days' sales uncollected. (Do not round Intermediate calculations.) b. ldently the company you consider to be the better short-term credit risk. Problem 13-5A Part 1 Required: 1a. For both companies compute the (a) current ratio, (6) acid-test ratio, ( accounts receivable tu sales in inventory, and (days' sales uncollected. (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. 1A Current Ratio 1A Acid Test Ratio 1A Days Sal 1A Acct Rec Turn 1A Invent Turnover 1 A Days Sal in INV 1B short term For both companies compute the current ratio. Current Ratio Choose Denominator: Current liabilities Company Choose Numerator: Current assets Barco 146,040 Kyan 225,350 Current Ratio Current ratio 2.4 to 1 2.4 to 1 60,340 92,300 1A Acid Test Ratio > Problem 13-5A Part 1 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, ( accounts receivable turnover, (a) inventory turnover, (e) day sales in Inventory, and (days' sales uncollected. (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. 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in 1A Days Sal Uncol 15 short term For both companies compute the acid-test ratio. Acid-Test Ratio (b) Company Cash Barco $ Kyan $ Choose Numerator: Short-term investments + / Choose Denominator: Current liabilities $ $ Current receivables 55,900 83,400 = Acid-Test Ratio Acid-test ratio 60,340 - 1.2 to 1 93,300 1.3 to 1 19,500 34,000 1A Current Ratio 1A Aoot Rec Turn > Problem 13-5A Part 1 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (o) inve sales In Inventory, and (days' sales uncollected. (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. 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec TUFn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term For both companies compute the accounts (including notes) receivable turnover. (c) Accounts Receivable Turnover Company Choose Numerator: Choose Denominator: Accounts Receivable Turnover Net sales 1 Average accounts receivable, net = Accounts receivable turnover Barco 770,000/ 32,100 24.0 times Kyan $ 890,2001$ 54,800 16.2 times 5 Problem 13-5A Part 1 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, ( accounts receivable turnover, (d) in sales In Inventory, and (days' sales uncollected. (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. 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec 1A Invent Tunover 1A Days Sal in Turn 1A Days Sal Uncol 1B short term For both companies compute the inventory turnover. (d) Inventory Turnover Choose Denominator: Average inventory Company Choose Numerator: Cost of goods sold 590,100 642,500 Inventory Turnover Inventory tumover 8.4 times 5.3 times 70,220 121,950 Problem 13-5A Part 1 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, ( accounts receivable turnover, (inve sales In Inventory, and (days' sales uncollected. (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. 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec 1A Invent Turnover 1A Days Sal in ny 1A Days Sala a 18 short term Uncol Turn For both companies compute the days' sales in inventory. Days Days' Sales in Choose Denominator: Cost of goods sold 585,100 632,500 Company Choose Numerator: Merchandise inventory 84,400 132,500 365 - Days' Sales in Inventory Days' sales in inventory 52.7 days 76.5 days 365 = 365 Problem 13-5A Part 1 Required: 1a. For both companies compute the (8) current ratio, (b) acid-test ratio, accounts receivable turnover, (inventory tu sales In Inventory, and (7 days' sales uncollected. (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. 1A Current Ratio 1A Acid Test 1A Acct Rec Turn Ratio 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term For both companies compute the days' sales uncollected. CompanyChoose Numerator: Current receivables, net Barco 46,500 Kyan 64,600 Days' Sales Uncollected Choose Denominator: Net sales X 770,000 $ 880,200 x Days = Days' Sales Uncollected 365 = Days' sales uncollected 365 22.0 days 365 = 26.8 days Problem 13-5A Part 1 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (q) accounts receivable turno sales in inventory, and () days' sales uncollected. (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. 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 31B short term Identify the company you consider to be the better short-term credit risk. Better short-term credit risk Barco company