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. Data from the current year- end balance sheets Assets Cash 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 Barco Company Kyan Company Barco Company Kyan Company Data from the current year's income statement Sales $ 20,500 $ 32,000 Cost of goods sold 59,400 Interest expense $810,000 591,100 7,600 $ 924,200 640,500 19,000 Income tax expense 15,569 25,514 Net income 195,731 239,186 5.15 5.81 3.72 3.98 39,400 84,440 138,500 5,900 7,100 350,000 306,400 $ 500,240 $ 543,400 $ 63,340 $ 104,300 81,800 103,000 190,000 206,000 165,100 130,100 Total liabilities and equity $ 500,240 $ 543,400 Basic earnings per share Cash dividends per share Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets $ 30,800 $ 57,200 53,600 105,400 448,000 362,500 Common stock, $5 par value Retained earnings 190,000 206,000 110,729 54,890 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) 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.