Summary information from the financial statements of two companies competing in the same industry follows. Problem 13-5A Comparative ratio analysis A1P3 T Barco Company Kyan Company Barco Kyan Sales Data from the current year-end balance sheets Assets Cash ... $19,500 Accounts receivable, net 37.400 Current notes receivable (trade).... 9.100 Merchandise inventory.......... 84.440 Prepaid expenses 5.000 Plant assets, net... 290,000 Total assets.. $445,440 $ 34,000 57.400 7.200 132.500 6.950 304,400 $542.450 Data from the current year's income statement $770,000 Cost of goods sold. 585, 100 Interest expense 7.900 Income tax expense..... 14,800 Net income ..................... 162.200 Basic earnings per share 451 Cash dividends per share............. $800,200 632,500 13,000 24,300 210,400 5.11 3.93 3.81 Liabilities and Equity Current liabilities Long-term notes payable. Common stock, 55 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 Beginning-of-year balance sheet data Accounts receivable, net Current notes receivable (trade) ........ Merchandise inventory Total assets.... . Common stock. $5 par value...... Retained earnings... $ 29,800 0 55,600 398,000 180,000 98,300 $ 54,200 0 107,400 382,500 206,000 93.600 Check (1) Kyant Accounts receivable turnover, 148 Inventory turnover, 5.3 2) Barco: Profit maron 21.1 PE 166 Required 1. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) receive able turnover. (d) inventory turnover, (e) days' sales in inventory, and (/days' sales uncollected. Identify the company you consider to be the better short-term credit risk and explain why. Round to one decimal place. 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 dividend yields. Round to one decimal place. Identify which company's stock you would recommend as the better investment and explain why