Required information Problem 13-5A Comparative ratio analysis LO A1, 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 Barco Kyan Company Company Company Company Data from the current year-end balance sheets Assets Cash Accounts receivable, net Current notes receivable (trade) Merchandise inventory Prepaid expenses Plant assets, net Total assets Data from the current year s income statement Sales $780,000 $898,200 595,100 650,500 9,100 14,000 14,99224,797 160,808 208,903 4.024.84 3.95 $ 20,500 $ 32,000 Cost of goods sold 39,400 59,400 Interest expense 10,000 84,940 128,500 Net income 7,200 Income tax expense 6,200 7,450 Basic earnings per share 330,000 313,400 Cash dividends per share 3.78 $491,040 $547,950 Beginning-of-year balance sheet data Accounts receivable, net Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 25,800 52,200 $67,340 $ 96,300 Current notes receivable (trade) 83,800 115,000 Merchandise inventory 200,000 216,000 Total assets 139,900 120,650 Common stock, $5 par value 61,600 107,400 388,000 422,500 200,000 216,000 130,292 82,387 $491,040 $547,950 Retained earnings Problem 13-5 Part 1 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, ( accounts (including notesevable turnover, (a) inventory turnover, (e) days' sales in inventory, and ( days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be better short-term credit risk. Required information Problem 13-5A Comparative ratio analysis LO A1, 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 Barco Kyan Company Company Company Company Data from the current year-end balance sheets Assets Cash Accounts receivable, net Current notes receivable (trade) Merchandise inventory Prepaid expenses Plant assets, net Total assets Data from the current year s income statement Sales $780,000 $898,200 595,100 650,500 9,100 14,000 14,99224,797 160,808 208,903 4.024.84 3.95 $ 20,500 $ 32,000 Cost of goods sold 39,400 59,400 Interest expense 10,000 84,940 128,500 Net income 7,200 Income tax expense 6,200 7,450 Basic earnings per share 330,000 313,400 Cash dividends per share 3.78 $491,040 $547,950 Beginning-of-year balance sheet data Accounts receivable, net Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 25,800 52,200 $67,340 $ 96,300 Current notes receivable (trade) 83,800 115,000 Merchandise inventory 200,000 216,000 Total assets 139,900 120,650 Common stock, $5 par value 61,600 107,400 388,000 422,500 200,000 216,000 130,292 82,387 $491,040 $547,950 Retained earnings Problem 13-5 Part 1 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, ( accounts (including notesevable turnover, (a) inventory turnover, (e) days' sales in inventory, and ( days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be better short-term credit risk
