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 $ 21,500 $ 32,000 Accounts receivable, net 37,400 56,400 Current notes receivable (trade) 9,600 8,400 Merchandise inventory 84,640 130,500 Prepaid expenses 5,400 6,950 Plant assets, net 280,000 305,400 Total assets $438,540 $539,658 Barco Kyan Company Company Data from the current years income statement Sales $770,000 $891,200 Cost of goods sold 589, 180 644,500 Interest expense 8,300 12,000 Income tax expense 14,800 24.603 Net income 157, 809 210,097 Basic earnings per share 4.64 4.86 Cash dividends per share 3.71 4.02 $ 26,800 $ 57,200 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 69,340 $ 93,300 85,800 111,000 170,000 216,000 113,400 119,350 $438,540 $539,650 Beginning-of-year balance sheet data Accounts receivable, net Current notes receivable (trade) Merchandise inventory Total assets Common stock, $5 par value Retained earnings 61,600 388,000 170,000 81,748 115.400 382,500 216.000 82,917 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 days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be better short-term credit risk. 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol Reg 1B For both companies compute the acid-test ratio. (b) Company Cash Barco $ Kyan $ Choose Numerator: Short-term investments Acid-Test Ratio Choose Denominator: Current receivables 11 Current liabilities + 21,500 + 32,000 + - Acid-Test Ratio Acid-test ratio 0 to 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 Req 1B For both companies compute the accounts (including notes) receivable turnover. (c) Accounts Receivable Turnover Company Choose Numerator: I Choose Denominator: = Accounts Receivable Turnover = Accounts receivable turnover Barco 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 Req 1B For both companies compute the inventory turnover. (d) Company Choose Numerator: Inventory Turnover I Choose Denominator: = Inventory Turnover Inventory turnover 0 times 0 times Barco Kyan 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in 1A Days Sal Inv Uncol Req 1B For both companies compute the days' sales in inventory. (e) Company Choose Numerator: Days' Sales in Inventory. Choose Denominator: x Days = Days' Sales in Inventory = Days' sales in inventory 0 days 0 days Barco Kyan 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol Req 1B For both companies compute the days' sales uncollected. Days' Sales Uncollected 7 Choose Denominator: CompanyChoose Numerator: Days - Days' Sales Uncollected = Days' sales uncollected 0 days 0 days Barco Kyan 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 ( days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be 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 Inv 1A Days Sal Uncol Req 1B Identify the company you consider to be the better short-term credit risk. Better short-term credit risk