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 balance sheets			Data from the current years income statement
Assets			Sales	$ 800,000	$ 886,200
Cash	$ 19,000	$ 35,000	Cost of goods sold	589,100	632,500
Accounts receivable, net	36,400	56,400	Interest expense	7,700	15,000
Merchandise inventory	84,940	140,500	Income tax expense	15,377	24,465
Prepaid expenses	5,300	7,500	Net income	187,823	214,235
Plant assets, net	320,000	305,400	Basic earnings per share	4.27	4.54
Total assets	$ 465,640	$ 544,800	Cash dividends per share	3.70	3.93
Liabilities and Equity			Beginning-of-year balance sheet data
Current liabilities	$ 62,340	$ 101,300	Accounts receivable, net	$ 29,800	$ 54,200
Long-term notes payable	85,800	99,000	Merchandise inventory	61,600	109,400
Common stock, $5 par value	220,000	236,000	Total assets	448,000	382,500
Retained earnings	97,500	108,500	Common stock, $5 par value	220,000	236,000
Total liabilities and equity	$ 465,640	$ 544,800	Retained earnings	72,477	79,761

Part1

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 (f) days sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be the better short-term credit risk.

Part2

2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each companys stock can be purchased at $70 per share, compute their (e) price-earnings ratios and (f) dividend yields. 2b. Identify which companys stock you would recommend as the better investment.