Required information Ratio analysis [The following information applies to the questions displayed below.] Summary information from the financial statements of two companies competing in the same industry follows. Iroquois Company Percy Company Iroquois Company Percy Company Data from the current year-end balance sheets Data from the current year's income statement Assets Sales $ 780,000 $ 878,200 Cash $ 18,500 $ 33,000 Accounts receivable, net 36,400 Merchandise inventory 84,440 Prepaid expenses Plant assets, net 5,500 300,000 Current liabilities Total assets Liabilities and Equity Long-term notes payable Common stock, $5 par value Retained earnings $ 444,840 $ 545,250 $ 63,340 80,800 190,000 110,700 $ 93,300 101,000 206,000 144,950 Total liabilities and equity $ 444,840 $ 545,250 59,400 138,500 6,950 307,400 Cost of goods sold Interest expense Income tax expense Net income Basic earnings per share Cash dividends per share Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings 590,100 9,300 640,500 13,000 14,992 24,244 165,608 200,456 4.36 4.87 3.73 3.96 $ 26,800 $ 57,200 61,600 105,400 408,000 372,500 190,000 206,000 86,832 107,646 Ratio Analysis Problem 4 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.