Question 9 Regular H

Problem 13-5A (Static) 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 Company Kyan Company Barco Company Kyan Company Data from the current year-end balance sheets Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 19,500 46,500 84,440 5,000 290,000 $ 445,440 $ 34,000 64,600 132,500 6,950 304,400 $ 542,450 $ 770,000 585,100 7,900 14,800 162,200 4.51 $ 880,200 632,500 13,000 24,300 210,400 5.11 Data from the current year's 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 Common stock, $5 par value Retained earnings 3.81 3.93 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 61,340 80, 800 180,000 123,300 $ 445,440 $ 93,300 101,000 206,000 142, 150 $ 542,450 $ 29,800 55,600 398,000 180,000 98,300 $ 54,200 107,400 382,500 206,000 93,600 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 1 B short term For both companies compute the current ratio. Current Ratio (a) Company Numerator: / Denominator: Current Ratio / Current ratio Barco / = to 1 Kyan / to 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 acid-test ratio. Acid-Test Ratio (b) Company Numerator: Denominator: Acid-Test Ratio + + = Acid-test ratio Barco + = to 1 + + Kyan + 1 to 1 Complete this question by entering your answers in the tabs below. 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Days Sal in 1A Invent Turnover 1A Days Sal Uncol 1B short term Inv For both companies compute the accounts (including notes) receivable turnover. Accounts Receivable Turnover (c) Company Numerator: / Denominator: Accounts Receivable Turnover / = Accounts receivable turnover Barco / times Kyan / = times 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 1 B short term For both companies compute the inventory turnover. (d) Inventory Turnover Denominator: Company Numerator: II Inventory Turnover Inventory turnover / = Barco / times Kyan / 11 times Complete this question by entering your answers in the tabs below. 1A Current Ratio 1 A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1 A Days Sal Uncol 1 B short term For both companies compute the days' sales in inventory. (e) Company Days' Sales in Inventory Denominator: Numerator: 1 x Days II / x x Days' Sales in Inventory Days' sales in inventory days days Barco / Kyan / 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 uncollected. (f) Company Days' Sales Uncollected Denominator: Days Numerator: X / Days' Sales Uncollected Days' sales uncollected days Barco / Kyan / days