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show all steps/work and formulas please Problem 13-5A Comparative ratio analysis A19 P3Q U Summary information from the financial statements of two companies competing in
show all steps/work and formulas please
Problem 13-5A Comparative ratio analysis A19 P3Q U 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 $ 19,500 $ 34,000 Accounts receivable, net 37,400 57,400 Current notes receivable (trade) 9,100 7,200 Merchandise inventory 84,440 132,500 Prepaid expenses 5,000 6,950 Plant assets, net | 290,000 304,400 Total assets $445,440 $542,450 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 61,340 80,800 180,000 |123,300 $445,440 $ 93,300 101,000 206,000 142,150 $542,450 Page 622 Required 1. 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. Identify the company you consider to be the better short-term credit risk and explain why. Round to one decimal place. Check (1) Kyan: Accounts receivable turnover, 14.8; Inventory turnover, 5.3 2. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (C) return on total assets, and (d) return on common stockholders' equity. Assuming that each company's stock can be purchased at $75 per share, compute their (C) price- earnings ratios and (f) dividend yields. Round to one decimal place. Identify which company's stock you would recommend as the better investment and explain why. (2) Barco: Profit margin, 21.1%; PE, 16.6Step by Step Solution
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