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 Cash Barco Kyan Barco Kyan Company Company Company Company Data from the current year-end balance Data from the current year's income sheets statement Assets Sales $770,000 $880,200 $ 19,500 $ 34,000 Cost of goods sold 585,100 632,500 Accounts receivable, 46,500 64,600 Interest expense net 7,900 13,000 Merchandise inventory 84,440 132,500 Income tax expense 14,800 24,500 Prepaid expenses 5,000 6,950 Net income 162,200 210,400 Plant assets, net 290,000 304,400 Basic earnings per 4.51 share Total assets $445,440 $542,450 Cash dividends per 3.81 3.93 share 5111 - Liabilities and Equity Beginning-of-year balance sheet data Current liabilities $ 61,340 $ 93,300 Accounts receivable, net $ 29,800 $ 54, Long-term notes payable 80,800 101,000 Merchandise inventory 55,600 107,400 Common stock, $5 par 180,000 206,000 Total assets 398,000 382 value Retained earnings 123,300 142, 150 Common stock, $5 par value 180,000 206,000 Total liabilities and $445,440 $542,450 Retained earnings 98,300 equity 4,400 1,500 93,00 Problem 13-5A 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 (7 days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be the better short-term credit risk. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. 1A 1A Acid 1A Acct 1A Invent 1A Days 1A Days 1B short Current Test Ratio Rec Turn Turnover Sal in Inv Sal Uncol term For both companies compute the acid-test ratio. (b) Acid-Test Ratio Company Choose Numerator: Acid- Test Ratio Acid-test Cash Choose Denominator: Current liabilities $ 61,340 = + Current receivables Short-term investments $ 46,500X + ratio Barco $ 19,500+ OX to 1 Kyan $ 34,000+ $ 64,600X + IX/ $ 93,300= to 1 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. 1A 1A Acid 1A Acct 1A Invent 1A Days 1A Days 1B short Current Test Ratio Rec Turn Turnover Sal in Inv Sal Uncol term For both companies compute the days' sales in inventory. (e) Company Choose Numerator: Merchandise inventory $ 70,020 / $ 119,950x17 Days' Sales in Inventory Choose x Denominator: Days Cost of goods 36 sold $ 585,100X 365 $ 632,500x 365 Days' Sales in Inventory Days' sales in inventory 43.7 days 69.2 days = Barco Kyan = Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. 1A 1A Acid 1A Acct 1A Invent 1A Days 1A Days 1B short Current Test Ratio Rec Turn Turnover Sal in Inv Sal Uncol term For both companies compute the days' sales uncollected. (f) Days' Sales Uncollected Choose Denominator: Days Company Choose Numerator: Current 17 receivables, net $ 38,150X/ $ 59,400 X/ Net sales X 36= Days' Sales Uncollected Days' sales uncollected 18.1 days 24.6 Barco Kyan $ $ 770,000x 880,200 365 365 days
