Required Information Problem 13-5A 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 Barco Kyan Company Company Company Company Data from the current year-end balance sheets Data from the current year's income statement Assets Sales $788,888 $915,200 Cash $ 22,588 $ 31,280 Cost of goods sold 592,180 646582 Accounts receivable, net 36,480 53,400 Interest expense 9, eee 14, eee Merchandise inventory 84,948 132,500 Income tax expense 14,992 25 266 Prepaid expenses 5,900 7,480 Net income 163,988 229,434 Plant assets, net 370,000 305,400 Basic earnings per share 3.99 4.86 Total assets $519,740 $529,789 Cash dividends per share 3.76 T Liabilities and Equity Beginning-of-year balance sheet data Current liabilities $ 69, 340 $ 99,390 Accounts receivable, net $ 26,800 $ 55,200 Long-term notes payable 8 , 880 99 , Merchandise inventory 59,600 113,40 Common stock, $5 par value 219,880 236, eee Total assets 418,000 402 see Retained earnings 159,680 95,400 Common stock, $5 par value 210, eae 236, eee Total liabilities and equity $519,749 $529,700 Retained earnings 153,612 51 934 3.94 Problem 13-5A Part 1 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (o) Inventory turnover, (e) days' sales in Inventory, and (7 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 1 A Days Sal in Inv 1A Days Sal Uncol 1B short term For both companies compute the current ratio. (a) Company Choose Numerator: Current assets Current Ratio Choose Denominator: Current liabilities Current Ratio Current ratio = Barco 1 Oto 1 Kyan / 0 to 1 A Current Ratio 1A Acid Test Ratio > 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 Current assets Choose Numerator: Choose Denominator: + Current liabilities Acid-Test Ratio Acid-test ratio oto 1 Barco + Kyan 0 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 1A Days Sal Inv Uncol 1B short term For both companies compute the inventory turnover. Inventory Turnover (d) Inventory Turnover Company Choose Numerator: 1 Choose Denominator: Cost of goods sold 1 Average inventory Barco $ 592,100 / Kyan $ 646,500 / = Inventory turnover o times = o 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 1A Days Sal Inv Uncol 1B short term For both companies compute the days' sales in inventory. (e) Days' Sales in Inventory Company Choose Numerator: 1 Choose Denominator: x Merchandise inventory 1 Cost of goods sold x Barco S 84.94011 $ 592,100 x Kyan S 132.500 / $ 646,500 x Days = Days Sales in Inventory 365 = Days' sales in inventory 365 = 52.4 days 74.8 days 365 = 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 1 A Days Salin Inv 1A Days Sal Uncol 1B short term For both companies compute the days' sales uncollected. Days' Sales Uncollected (f) CompanyChoose Numerator: Current receivables, net = Days' Sales Uncollected I Choose Denominator: Net sales X Days x 365 = Days' sales uncollected Barco $ 36.400 / S 780,000 x 365 = 17.0 days Kyan $ 53,4001 S 915,200 x 365 - 21.3 days 1A Days Sal in Inv 18 short term> 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 Salin Iny 1A Days Sal Uncol 18 short term Identify the company you consider to be the better short-term credit risk. Better short-term credit risk Kyan company 1A Days Sal Uncol B Short term