Problem 13-5A 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.

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 $ 20,500 $ 31,000 Accounts receivable, net 38,400 53,400 Merchandise inventory 84,540 136,500 Prepaid expenses 5,900 7,650 Plant assets, net 280,000 308,400 Total assets $429,340 $536,950 Barco Kyan Company Company Data from the current year's income statement Sales $780,000 $896,200 Cost of goods sold 585, 100 638,500 Interest expense 8,400 11,000 Income tax expense 14,992 24,741 Net income 171,508 221,959 Basic earnings per share 4.51 5.39 Cash dividends per share 3.77 3.96 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 61,340 $ 97,300 84,800 99,000 190,000 206,000 93,200 134,650 $429,340 $536,950 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 32,800 55,600 408,000 190,000 64,952 $ 52,200 105,400 402, 500 206,000 75,843 Problem 13-5A 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 (1days' 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 1B short term For both companies compute the current ratio. (a) Current Ratio Company Choose Numerator: 1 Choose Denominator: = = Current Ratio Current ratio oto 1 0 to 1 Barco = Kyan / 1A Current Ratio 1A Acid Test Ratio > Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (a) inventory turnover, (e) days' sales in inventory, and (1) 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 Acid Test Ratio 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1 B short term For both companies compute the acid-test ratio. Acid-Test Ratio (b) Company Choose Numerator: Choose Denominator: Acid-Test Ratio Acid-test ratio + + / Barco + + / = 0 to 1 0 to 1 Kyan + + 1 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 1B short term For both companies compute the inventory turnover. (d) Inventory Turnover Company Choose Numerator: | Choose Denominator: = Inventory Turnover Inventory turnover / = Barco = 0 times Kyan / = II 0 times 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 (1) 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 Inv Uncol 1B short term For both companies compute the days' sales in inventory. (e) Company Choose Numerator: Days' Sales in Inventory. | Choose Denominator: Days / x = = Days' Sales in Inventory Days' sales in inventory 0 days II Barco / x II Kyan / 0 days 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 (1) 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 1B short term For both companies compute the days' sales uncollected. Days' Sales Uncollected (f) CompanyChoose Numerator: | Choose Denominator: Days = Days' Sales Uncollected Days' sales uncollected = Barco 1 = 0 days Kyan = 0 days Problem 13-5A Part 1 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (a) inventory turnover, (e) days' sales in inventory, and (i) 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 1B short term Identify the company you consider to be the better short-term credit risk. Better short-term credit risk 1A Days Sal Uncol 1B short term