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. Kyan Company Barco Kyan Company Company Data from the current year-end balance sheets Assets Cash $ 18,500 $ 34,000 Accounts receivable, net 38,400 55,400 Merchandise inventory 84,640 136,500 Prepaid expenses 5,800 7,250 Plant assets, net 290,000 305,400 Total assets $437, 340 $538,550 Barco Company Data from the current year's income statement Sales $770,000 Cost of goods sold 584,100 Interest expense 7,700 Income tax expense 14,800 Net income 163,400 Basic earnings per share 5.11 Cash dividends per share 3.74 $887,200 632,500 11,000 24,493 219, 207 5.07 3.97 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 67, 340 $ 101, 300 85,800 103,000 160,000 216,000 124,200 118,250 $437, 340 $538,550 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 26,800 $ 55,200 59,600 113, 400 458,000 392,500 160,000 216,000 80,480 70,547 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. 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 1B short term For both companies compute the current ratio. Current Ratio (a) Company Choose Numerator: Current assets 1 Choose Denominator: 1 Current liabilities Current Ratio Current ratio 0 to 1 oto 1 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 1B short term For both companies compute the acid-test ratio. Acid-Test Ratio (b) Company Cash Acid-Test Ratio Choose Numerator: Short-term investments Choose Denominator: Current liabilities + + + Current receivables Acid-test ratio Barco = + + 0 to 1 oto 1 Kyan + + 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal || 1B short term Uncol For both companies compute the accounts (including notes) receivable turnover. Accounts Receivable Turnover (c) Company Choose Numerator: I Choose Denominator: 1 Average accounts receivable, net Net sales = Accounts Receivable Turnover = Accounts receivable turnover 0 times Barco 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 1B short term For both companies compute the inventory turnover. Inventory Turnover (d) Company Choose Numerator: Cost of goods sold Barco 1 Choose Denominator: Average inventory = Inventory Turnover = Inventory turnover 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 1B short term For both companies compute the days' sales in inventory. (e) Company Choose Numerator: Merchandise inventory Days Days' Sales in Inventory 1 Choose Denominator: x 1 Cost of goods sold x = 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 1B short term For both companies compute the days' sales uncollected. Days' Sales Uncollected (f) Company Choose Numerator: Current receivables, net Days X | Choose Denominator: i Net sales = Days' Sales Uncollected = Days' sales uncollected o days X Barco X Kyan 0 days 1A Current Ratio 1A Acid Test Ratio | 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term Identify the company you consider to be the better short-term credit risk. Better short-term credit risk Barco company