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 Company Data from the current year-end balance sheets Assets Cash $ 18,500$ Accounts receivable, net 40,400 Current notes receivable (trade) 9,500 Merchandise inventory 84,540 Prepaid expenses 5,800 Plant assets, net 300,000 Total assets $ 458, 740 $ 33,000 55,400 8,600 130,500 7,700 305,400 540,600 $ Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity 64,340$ 84,800 190,000 119,600 458, 740 $ 90,300 109,000 236,000 105,300 540,600 $ Data from the current year's income statement Sales 780,000 $ Coat of goods sold 583, 100 Interest expense 8,800 Income tax expense 14,992 Net income 173, 108 Basic earnings per share 4.56 Cash dividends per share 3.80 892,200 636,500 12,000 24,631 219,069 4.64 3.94 $ Beginning-of-year balance sheet data Accounts receivable, net Current notes receivable (trade) Merchandise inventory Total assets Common stock, $5 par value Retained earnings 28,800 $ 0 61,600 388,000 190,000 90,892 56,200 0 105,400 362,500 236,000 72,199 Required: 1a. For both companies compute the () current ratio. (c) acld-test ratio, ( accounts (including notes) receivable turnover. (o inventory turnover. (e) days' sales in inventory, and (4 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 Days Sal in 1A Days Sal Inv Uncol Reg 1B 1A Current IA Acid Test 1A Acct Rec 1A Invent Ratio Ratio Turn Turnover For both companies compute the current ratio. (a) Current Ratio Choose Denominator: Company Choose Numeratori Current Ratio Current ratio to 1 : Barco Kyan 1 to 1 1 Cumalo 1A Acid Test Ratio > 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Salin Inv 1A Days Sal Uncol Reg 13 For both companies compute the acid-test ratio. (b) Acid Test Ratio Choose Numerator: Choose Denominator: Company Acid-Test Ratio Acid-test ratio to 1 Barco +. to 1 Kyan 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Salin Inv 1A Days Sal Uncol Req 1B For both companies compute the accounts (including notes) receivable turnover. Choose Company Numerator: (c) Accounts Receivable Turnover 1 Choose Denominator: Accounts Receivable Turnover 1 = Accounts receivable turnover 1 times 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 inventory turnover. (d) Inventory Turnover Company Choose Numerator: 1 Choose Denominator: 1 = Inventory Turnover = Inventory turnover times times Barco 1 11 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 in inventory. (e) Days' Sales in Inventory Choose Denominator: X Company Choose Numerator: Days = Days' Sales in Inventory = Days' sales in inventory days days = Barco 11 Kyan 1A Current Ratio 1A Acid Test 1A Acct Rec Ratio Turn 1A Invent Turnover 1A Days Sal in Inv Req 1B 1A Days Sal Uncol For both companies compute the days' sales uncollected. CompanyChoose Numerator: () Days' Sales Uncollected 1 Choose Denominator: 1 x Days = Days' Sales Uncollected = Days' sales uncollected x 11 1 X Barco Kyan days days 11 = 1A Current Ratio 1A Acid Test Ratio Reg 1B 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol Identify the company you consider to be the better short-term credit risk. Better short-term credit risk