Problem 13-5A Comparative ratio analysis LO A1, 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 yan Company Barco Kyan Company Company Company Data from the current year's income statement Data from the current year-end balance sheets $790,000 591,100 7,900 15,185 175,815 5.17 $904,200 Assets Sales 638 500 13,000 24 962 19,500 $ 34,000 38,400 9,700 84,340 5,400 340,000 Cash Cost of goods sold Interest expense Income tax expense Accounts receivable, net Current notes receivable (trade) Merchandise inventory Prepaid expenses Plant assets, net 59,400 7,200 136,500 7,450 Net income 227,738 .27 Basic earnings per share Cash dividends 312,400 er share 3.75 3.92 $497,340 $556,950 Total assets Beginning-of-year balance sheet data Accounts receivable, net Current notes receivable (trade) Merchandise inventory 26,800 53 200 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings 65,340 92,300 84,800 170,000 177,200 0 109 400 362,500 216 000 57,600 418,000 170,000 111,000 216,000 137,650 Total assets Common stock, $5 par value $497,340 $556,950 Retained earnings Total liabilities and equity 128,885 79,256 Problem 13-5 Part 1 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) receivable turnover, (d) inventory turnover, (e) days' sales in inventory, and ( days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be better short-term credit risk. Complete this question by entering your answers in the tabs below. 1A Days Sal in 1A Acid Test Ratio 1A Days Sal Uncol 1A Current 1A Acct Rec 1A Invent Req 1B Ratio Turn Turnover Inv For both companies compute the current ratio (a) Current Ratio Choose Denominator: Company Choose Numerator: Current Ratio Current assets Current ratio Current liabilities 157,340 2.4 to 1 Barco S $ 65,340 244,550 92,300 2.6 to 1 yan 1A Acid Test Ratio 1A Current Ratio Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) 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 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 in 1A Days Sal Uncol 1A Acct Rec 1A Invent Req 1B Turn Turnover Inv For both companies compute the acid-test ratio. Acid-Test Ratio (b) Company Choose Numerator: Choose Denominator: Acid-Test Ratio Short-term investments Current liabilities Cash Current receivables Acid-test ratio 19,500 65,340= 48,100 1.0 to 1 Barco S + 66,600 92,300 1.1 to 1 yan 34,000 1A Current Ratio 1A Acct Rec Turn > + + + Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) receivable turnover, (d) inventory turnover, (e) days' sales in inventory, and ( days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be better short-term credit risk. Complete this question by entering your answers in the tabs below. 1A Acid Test Ratio 1A Days Sal in 1A Days Sal Uncol 1A Current 1A Acct Rec 1A Invent Req 1B Ratio Turn Turnover Inv For both companies compute the accounts (including notes) receivable turnover. Accounts Receivable Turnover (c) Choose Denominator: Accounts Receivable Turnover Company Choose Numerator: Average accounts receivable, net Net sales Accounts receivable turnover 0times Barco 0l times yan 1A Acid Test Ratio 1A Invent Turnover Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) receivable turnover, (d) inventory turnover, (e) days' sales in inventory, and ( days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be better short-term credit risk. Complete this question by entering your answers in the tabs below. 1A Days Sal Uncol 1A Acid Test Ratio 1A Days Sal in 1A Current 1A Acct Rec 1A Invent Req 1B Ratio Turn Turnover Inv For both companies compute the inventory turnover. Inventory Turnover (d) IChoose Denominator: Inventory Turnover Company Choose Numerator: Inventory turnover 0 times Barco 0 times yan 1A Acct Rec Turn 1A Days Sal in Inv > Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) receivable turnover, (d) inventory turnover, (e) days' sales in inventory, and ( days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be better short-term credit risk. C Complete this question by entering your answers in the tabs below. 1A Days Sal in 1A Acid Test Ratio 1A Days Sal Uncol 1A Current 1A Acct Rec 1A Invent Req 1B Ratio Turn Turnover Inv For both companies compute the days' sales in inventory. Days' Sales in Inventory (e) Company Choose Numerator: Choose Denominator: Days Days' Sales in Inventory X Days' sales in inventory 0 days X Barco X Kyan 0 days X 1A Invent Turnover 1A Days Sal Uncol Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) receivable turnover, (d) inventory turnover, (e) days sales in inventory, and ( days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be better short-term credit risk. Complete this question by entering your answers in the tabs below. 1A Days Sal in 1A Acid Test Ratio 1A Current 1A Acct Rec 1A Invent 1A Days Sal Uncol Req 1B Ratio Turn Turnover Inv For both companies compute the days' sales uncollected. Days' Sales Uncollected (f) Days' Sales Uncollected X Days CompanyChoose Numerator: Choose Denominator: =Days' sales uncollected X 0 days Barco X 0 days yan X 1A Days Sal in Inv Req 1B