! Required information [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 Company Company Data from the current year-end balance sheets Assets Cash $ 18,500 $ 34,000 Accounts receivable, net 54,400 Merchandise inventory 84,740 142,500 Prepaid expenses 6,000 7,800 Plant assets, net 330,000 303, 400 Total assets $ 478,640 $542,100 39,400 Barco Kyan Company Company Data from the current year's income statement Sales $790,000 $881,200 Cost of goods sold 584,100 642,500 Interest expense 7,700 13,000 Income tax expense 15,185 24,327 Net income 183,015 201, 373 Basic earnings per share 5.38 Cash dividends per share 3.76 4.03 4.89 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 64,340 $ 93,300 83,800 105,000 170,000 206,000 160, 500 137,800 $478,640 $542,100 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 28,800 $ 51,200 55,600 107,400 438,000 402, 500 170,000 206,000 105,325 102,463 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 ( days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be the better short-term credit risk. 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Iny 1A Days Sal Uncol 1 B short term For both companies compute the current ratio. Current Ratio (a) Company Choose Numerator: 1 Choose Denominator: = Current Ratio / = II Current ratio Barco / = oto 1 0 to 1 Kyan / = II 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 Choose Numerator: Choose Denominator: Acid-Test Ratio IIII + + = Acid-test ratio Barco + + 1 0 to 1 Kyan + + 1 0 to 1 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 accounts (including notes) receivable turnover. (c) Accounts Receivable Turnover Company Choose Numerator: | Choose Denominator: = Accounts Receivable Turnover 1 = Accounts receivable turnover > Barco / II = 0 times Kyan = 0 times 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 inventory turnover. (d) Inventory Turnover Company Choose Numerator: / Choose Denominator: = Inventory Turnover Inventory turnover / = Il Barco = 0 times Kyan 1 = 0 times 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 days' sales in inventory. Days' Sales in Inventory. (e) Company Choose Numerator: | Choose Denominator: Days = Days' Sales in Inventory = Days' sales in inventory 1 Barco 1 x = 0 days 0 days Kyan 1 II 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 days' sales uncollected. Days' Sales Uncollected (f) CompanyChoose Numerator: | Choose Denominator: Days = Days' Sales Uncollected / = Days' sales uncollected Barco / = 0 days Kyan 0 days 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 Identify the company you consider to be the better short-term credit risk. Better short-term credit risk