Required information Problem 13-5A (Algo) 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 Barco Company Company Company Data from the current year-end balance sheets Data from the current year's income statement Assets Sales $770,000 Cash $ 22,000 $ 33,000 Cost of goods sold 591,100 Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity 84,540 6,100 310,000 $ 461,040 5 547,050 38,400 55,400 Interest expense 7,600 $ 912,200 632,500 12,000 140,500 Income tax expense 14,800. 25,183 7,750 310,400 Net income 156,500 242,517 Basic earnings per share 3.91 5.14 Cash dividends per share 3.73 3.99 data $ 70,340 83,800 200,000 106,900 $ 95,300 115,000 236,000 Total assets 100,750 5 461,040 5 547,050 Beginning-of-year balance sheet Accounts receivable, net Merchandise inventory Common stock, $5 par value Retained earnings $ 28,000 $53,200 61,600 113,400 448,000 372,500 200,000. 236,000 99,600 46,561 Problem 13-5A (Algo) Part 1 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (d) inventory turnover, (e sales in inventory, and (1) days' sales uncollected. Note: 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 1A Acct Rec Ratio Turn Inv 1A Invent 1A Days Sal in 1A Days Sal Turnover Uncol 1B short term For both companies compute the current ratio. (8) Company Barco Kyan Numerator: Current Ratio Denominator: Current Ratio = Current ratio 0 to 1 0 to 1 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, (d) inventory turnover, (e) days sales in inventory, and (5 days' sales uncollected. Note: 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 1A Adid Test 1A Acct Rec Ratio Ratio Tum 1A Invent 1A Days Sal in 1A Days Sal Turnover Inv Uncol 1B short term For both companies compute the acid-test ratio. (b) Company Barco Kyan Numerator + . Acid-Test Ratio Denominator: Acid-Test Ratio Acid-test ratio 0 to 1 10 to 1 <1A Curront Ratio 1A Acct Rec Turn > Required information Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (d) inventory tur sales in inventory, and () days' sales uncollected. Note: 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 1A Acid Test 1A Acct Rec Ratio Ratio Turn 1A Invent 1A Days Sal in 1A Days Sal Turnover Uncol 1B short term For both companies compute the accounts (including notes) receivable turnover. (c) Company Numerator: Barco Kyan Accounts Receivable Turnover Denominator:' Accounts Receivable Turnover Accounts receivable turnover 0 times 0 times <1A Acid Test Ratio 1A Invent Turnover > 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 () days' sales uncollected. Note: 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 Invent Turnover 1A Days Sal in 1A Days Sal 18 short term Inv Uncol 1A Current 1A Acid Test 1A Acct Rec Ratio Ratio Turn For both companies compute the inventory turnover. (d) Company Numerator: 1 Barco 7 Kyan 1 Inventory Turnover Denominator: Inventory Turnover <1A Acct Rec Turn = Inventory turnover 0 times 0 times 1A Days Sal in Inv > 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 (4) days' sales uncollected. Note: 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 1A Acid Test 1A Acct Rec Ratio Ratio Tum 1A Invent 1A Day Sal in 1A Days Sal 18 short term Turnover For both companies compute the days' sales in inventory. (0) Company Numerator: Inv Days' Sales to Inventory Denomirtator: Uncol Barco Kyan T <1A Invent Turnover * x Days Days' Sales in Inventory Days' sales in inventory O days 0 days 1A Days Sal Uncol > 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 (4 days' sales uncollected. Note: 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 1A Acid Test 1A Acct Rec Ratio Ratio Turn 1A Invent 1A Days Sal in 1A Days Sal Turnover Inv Uncol 18 short term For both companies compute the days' sales uncollected. B Company Barco Kyan Numerator: Days' Sales Uncollected Denominator: Days Days' Sales Uncollected <1A Days Sal In Inv M Days' sales uncollected 0days 0 days 18 short term > 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 (5 days' sales uncollected. Note: 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 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent 1A Days Sal in 1A Days Sal Turnover Inv 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 18 short term >