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 Barco Kyan Company Company Company Company Data from the current year-end balance sheets Data from the current year's income statement Assets Sales $770,000 $880, 200 Cash $ 19,500 $ 34,000 Cost of goods sold 585,100 632,500 Accounts receivable, net 46,500 64,600 Interest expense 7,900 13,000 Merchandise inventory 84,440 132,500 Income tax expense 14,800 24,300 Prepaid expenses 5,000 6,950 Net income 162,200 210,400 Plant assets, net 290,000 304,400 Basic earnings per share 4.51 5.11 Total assets $445,440 $542,450 Cash dividends per share 3.81 3.93 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 61,340 $ 93,300 80, 800 101,000 180,000 206,000 123,300 142,150 $445,440 $542,450 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 29,800 $ 54,200 55,600 107,400 398,000 382,500 180,000 206,000 98,300 93,600 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 1A Acid Test 1A Acct Rec 1A Invent 1A Days Salin 1A Days Sal Ratio Ratio Turn 18 short term Turnover Inv Uncol For both companies compute the current ratio. Current Ratio Company Choose Numerator: Choose Denominator Current Ratio Current ratio Barco 1 0 to 1 Kyan / Oto 1 LA CUTTO Rato 1A Acid Test Ratio > Required: 1a. For both companies compute the (a) current ratio. (b) acid-test ratio, (accounts receivable turnover. (inventory turnover. (e) days' sales in inventory, and (1 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 1A Days Sal in 1A Days Sal Inv Uncol 1B short term For both companies compute the acid-test ratio. Acid-Test Ratio (b) Company Choose Numerator: Choose Denominator: = Acid-Test Ratio Acid-test ratio oto 1 0 to 1 Barco + / ++ Kyan 1 Required: 1a. For both companies compute the (a) current ratio. (b) acid-test ratio, (d accounts receivable turnover. (d) inventory turnover. (e) days' sales in inventory, and (1 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. Turn 1A Current 1A Acid Test 1A Acct Rec IA Invent 1A Days Sal in 1A Days Sal Ratio Ratio Turnover Inv Uncol 18 short term For both companies compute the inventory turnover. (d) Inventory Turnover Company Choose Numerator: 1 Choose Denominator: Inventory Turnover 1 Inventory turnover Barco 1 o times Kyan 0 times 1 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, ( accounts receivable turnover, (a) 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 1A Days Salin 1A Days Sal Turnover Inv Uncol 18 short term For both companies compute the days' sales in inventory. Days Sales in Inventory Company Choose Numerator: 1 Choose Denominator:* Days Days' Sales in Inventory Days' sales in inventory o days o days 1 Barco Kyan 1 x 1A Invent Turnover 1A Days Sal Uncol > Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (a) inventory turnover, (e) days' sales in inventory, and (1 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 1A Days Sal in 1A Days Sal Inv Uncol 1B short term For both companies compute the days' sales uncollected. (1) Days' Sales Uncollected Company Choose Numerator: 1 Choose Denominator: X Days 1 X = Days' Sales Uncollected Days' sales uncollected 0 days o days / X Barco Kyan 1 x 1A Days Sal in Inv 1B short term >
