Ratio analysis

[The following information applies to the questions displayed below.] Summary information from the financial statements of two companies competing in the same industry follows.

	Iroquois Company	Percy Company		Iroquois Company	Percy Company
Data from the current year-end balance sheets			Data from the current years income statement
Assets			Sales	$ 770,000	$ 880,200
Cash	$ 18,500	$ 34,000	Cost of goods sold	592,100	636,500
Accounts receivable, net	40,400	59,400	Interest expense	8,700	12,000
Merchandise inventory	84,240	136,500	Income tax expense	14,800	24,300
Prepaid expenses	6,200	7,500	Net income	154,400	207,400
Plant assets, net	350,000	309,400	Basic earnings per share	4.06	4.39
Total assets	$ 499,340	$ 546,800	Cash dividends per share	3.79	4.02
Liabilities and Equity			Beginning-of-year balance sheet data
Current liabilities	$ 69,340	$ 93,300	Accounts receivable, net	$ 27,800	$ 50,200
Long-term notes payable	81,800	101,000	Merchandise inventory	65,600	113,400
Common stock, $5 par value	190,000	236,000	Total assets	398,000	422,500
Retained earnings	158,200	116,500	Common stock, $5 par value	190,000	236,000
Total liabilities and equity	$ 499,340	$ 546,800	Retained earnings	147,820	98,844

Ratio Analysis Problem 4

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.

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.