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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
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 Data from the current year's balance sheets income statement Assets Cash $ 19,000 $ 36,000 Accounts receivable, net 34,400 Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities Long-term notes payable, Common stock, $5 par value Retained earnings: Total liabilities and equity 84,740 6,100 320,000 $ 464,240 $ 541,100 $ 69,340 $ 94,300 82,800 200,000 112,100 99,000 206,000 141,800 $464,240 $ 541,100 Cash dividends per share Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings 55,400 138,500 Sales Cost of goods sold Interest expense Income tax expense $ 800,000 593,100 $ 909,200 650,500 8,800 15,377 13,000 25,100 7,800 Net income 303,400 Basic earnings per share 182,723 220,600 4,57 5.35 3572 3.93 $ 29,800 $ 50,200 63,600 107,400 458,000 392,500 200,000 206,000 78,177 83,116 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. Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (d) inventory turnover, (e) c 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. 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 Inv 1A Days Sal in 1A Days Sal Uncol 18 short term For both companies compute the current ratio. (a) Company Numerator: Barco Kyan Current Ratio Denominator: Current Ratio = Current ratio = 0 to 1 0 to 1 (b) Company Acid-Test Ratio Numerator: Denominator: Barco Kyan Acid-Test Ratio Acid-test ratio 0 to 1 0 to 1 (c) Company Numerator: Barco Kyan Accounts Receivable Turnover Denominator: Accounts Receivable Turnover = Accounts receivable turnover 0 times 0 times (d) Company Barco Kyan Inventory Turnover Numerator: Denominator: Inventory Turnover Inventory turnover 0 times =0 times For both companies compute the days' sales in inventory. (0) Company Numerator: Days' Sales in Inventory Denominator: Barco Kyan Days x x x = Days' Sales in Inventory Days' sales in inventory 0 days 0 days Company Numerator: Barco Kyan Days' Sales Uncollected Denominator: * Days Days' Sales Uncollected x x x = Days' sales uncollected =2 0 days = 0 days
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