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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 Company Company Data from the current year-end balance sheets Assets Cash $ 22,500 $ 34,000 Accounts receivable, net 34,400 52,400 Merchandise inventory 84,640 140,500 Prepaid expenses 5, 2006,900 Plant assets, net 290,000 309,400 Total assets $436,740 $543,200 Barco Kyan Company Company Data from the current year's income statement Sales $ 780,000 $886,200 Cost of goods sold 595,100 650,500 Interest expense 8,100 13,000 Income tax expense 14,992 24,465 Net income 161, 808 198,235 Basic earnings per share 5.064 .59 Cash dividends per share 3.78 3.95 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 66,340 $ 97.300 82,800 107,000 160,000 216,000 127,600 122,900 $436,740 $543,200 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 32,800 $ 52,200 59,600 115,400 388,000 412,500 160,000 216,000 86,752 95,305 Problem 13-5A Part 1 Required: 1a. For both companies compute the current ratio. (b) acid-test ratio, accounts receivable turnover, (a) inventory turnover (e) days 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. 5A Part 1 mpanies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turn ory, and (days' sales uncollected. (Do not round intermediate calculations.) company you consider to be the better short-term credit risk. Answer is not complete. this question by entering your answers in the tabs below. 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term mpanies compute the accounts (including notes) receivable turnover. Accounts Receivable Turnover Choose Numerator: Net sales 780,000 886,200 1 Choose Denominator: Average accounts receivable, net 423,600 $ 52,300 = - = Accounts Receivable Turn Accounts receivable turnove 1.8 times 16.9 times 13-5A Part 1 th companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable ventory, and (days' sales uncollected. (Do not round intermediate calculations.) y the company you consider to be the better short-term credit risk. Answer is not complete. lete this question by entering your answers in the tabs below. rrent 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv lo 1A Days Sd1B short term Uncol th companies compute the days' sales uncollected. any Choose Numerator: Current receivables, net 34,400 1 1 Days' Sales Uncollected Choose Denominator: Net sales $ 780,000 886,200 x Days 365 365 - = Da Da
