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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

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[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 years income statement
Assets Sales $ 810,000 $ 912,200
Cash $ 18,000 $ 37,000 Cost of goods sold 592,100 638,500
Accounts receivable, net 37,400 58,400 Interest expense 8,500 10,000
Current notes receivable (trade) 9,900 7,400 Income tax expense 15,569 25,183
Merchandise inventory 84,340 142,500 Net income 193,831 238,517
Prepaid expenses 5,700 7,500 Basic earnings per share 5.10 5.52
Plant assets, net 310,000 303,400 Cash dividends per share 3.75 3.91
Total assets $ 465,340 $ 556,200
Beginning-of-year balance sheet data
Liabilities and Equity Accounts receivable, net $ 31,800 $ 54,200
Current liabilities $ 68,340 $ 95,300 Current notes receivable (trade) 0 0
Long-term notes payable 82,800 113,000 Merchandise inventory 57,600 105,400
Common stock, $5 par value 190,000 216,000 Total assets 418,000 402,500
Retained earnings 124,200 131,900 Common stock, $5 par value 190,000 216,000
Total liabilities and equity $ 465,340 $ 556,200 Retained earnings 72,869 62,295

Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) 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 better short-term credit risk.

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