Required information Problem 17-5A (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. Sales Cost of goods sold Barco Company Kyan Company Barco Company Kyan Company Data from the current year-end Data from the current year's balance sheets income statement Assets $ 770,000 $ 922,200 Cash $ 21,000 $ 37,000 Accounts receivable, net 36,400 53,400 84,440 138,500 6,000 330,000 7,250 306,400 Net income 596,100 630,500 9,200 19,000 14,800 | 25,459 149,900 247,241 3.75 5.24 3.80 3.93 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 $ 477,840 $ 542,550 $ 67,340 $ 101,300 85,800 105,000 200,000 Interest expense Income tax expense Basic earnings per share Cash dividends per share Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory 236,000 Total assets 124,700 100,250 $ 477,840 $ 542,550 Common stock, $5 par value Retained earnings $ 28,800 61,600 $ 52,200 113,400 408,000 362,500 200,000 236,000 126,800 38,505 Problem 17-5A (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. 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. Ratio 1A Current 1A Acid Test 1A Acct Rec Ratio Turn 1A Invent Turnover 1A Days Sal in 1A Days Sal Inv Uncol 1B short term For both companies compute the current ratio. (a) Company Numerator: Current assets Barco Kyan Current Ratio Denominator: = Current Ratio = = Current ratio 0 to 1 0 to 1 < 1A Current Ratio 1A Acid Test Ratio >