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 Company Kyan Company Barco Company Kyan Company Data from the current year-end balance sheets Data from the current year's income statement Assets Cash $ 20,000 $ 31,000 Accounts receivable, net 40,400 53,400 Merchandise inventory 84,640 138,500 Prepaid expenses Current liabilities Plant assets, net Total assets Liabilities and Equity Long-term notes payable Common stock, $5 par value Retained earnings 5,400 330,000 307,400 $ 480,440 $ 537,200 $ 65,340 $ 97,300 82,800 210,000 122,300 111,000 226,000 102,900 Total liabilities and equity $ 480,440 $ 537,200 6,900 Sales 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 $ 810,000 $ 896,200 584,100 8,700 638,500 19,000 15,569 24,741 201,631 4.80 3.79 213,959 4.73 3.98 $ 28,800 $ 56,200 55,600 117,400 458,000 382,500 210,000 226,000 79,849 68,837 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. 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. 1A Current 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent 1A Days Sal in 1A Days Sal Turnover Inv Uncol 1B short term For both companies compute the current ratio. (a) Company Choose Numerator: Barco Kyan 1 Current Ratio Choose Denominator: = Current Ratio = Current ratio 0 to 1 0 to 1 < 1A Current Ratio 1A Acid Test Ratio Complete this question by entering your answers in the tabs below. 1A Current 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent Turnover Inv 1A Days Sal in 1A Days Sal Uncol 1B short term For both companies compute the acid-test ratio. (b) Company Choose Numerator: Barco Kyan + + + + + Acid-Test Ratio Choose Denominator: 1 < 1A Current Ratio 1A Acct Rec Turn > = Acid-Test Ratio Acid-test ratio 0 to 1 0 to 1 Complete this question by entering your answers in the tabs below. 1A Current 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent 1A Days Sal in 1A Days Sal Turnover Inv Uncol 1B short term For both companies compute the accounts (including notes) receivable turnover. (c) Accounts Receivable Turnover Company Choose Numerator: Choose Denominator: Barco Kyan Accounts Receivable Turnover = Accounts receivable turnover 0 times 0 times < 1A Acid Test Ratio 1A Invent Turnover > Complete this question by entering your answers in the tabs below. 1A Current 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent 1A Days Sal in 1A Days Sal Turnover Inv Uncol 1B short term For both companies compute the inventory turnover. (d) Company Choose Numerator: Barco Kyan 1 1 Inventory Turnover Choose Denominator: = Inventory Turnover =Inventory turnover 0 times 0 times < 1A Acct Rec Turn 1A Days Sal in Inv > Complete this question by entering your answers in the tabs below. 1A Current 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent 1A Days Sal in 1A Days Sal Turnover Inv 1B short term Uncol For both companies compute the days' sales in inventory. (e) Company Choose Numerator: Barco Kyan Days' Sales in Inventory. Choose Denominator: x Days = Days' Sales in Inventory x = Days' sales in inventory x 0 days x 0 days < 1A Invent Turnover 1A Days Sal Uncol > Complete this question by entering your answers in the tabs below. 1A Current 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent 1A Days Sal in 1A Days Sal Turnover Inv Uncol 1B short term For both companies compute the days' sales uncollected. (f) Company Choose Numerator: Barco Kyan Days' Sales Uncollected Choose Denominator: x Days = Days' Sales Uncollected x = Days' sales uncollected x 0 days x 0 days < 1A Days Sal in Inv 1B short term > Complete this question by entering your answers in the tabs below. 1A Current 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent 1A Days Sal in 1A Days Sal Turnover Inv 1B short term Uncol Identify the company you consider to be the better short-term credit risk. Better short-term credit risk < 1A Days Sal Uncol 1B short term >