Summary information from the financial statements of two companies competing in the same industry follows. Barco Company Kyan Company Data from the current year-end balance sheets Assets Cash Accounts receivable, net Merchandise inventory. Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 19,500 46,500 84,440 5,000 290,000 $445,440 $542,450 $ 34,000 64,600 132,500 6,950 Interest expense Income tax expense Net income 304,400 Basic earnings per share Cash dividends per share $ 61,340 $ 93,300 80,800 101,000 180,000 206,000 123,300 142,150 $445,440 $542,450 Data from the current year's income statement Sales Cost of goods sold Barco Company Beginning-of-year balance sheet datal Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings Kyan Company $770,000 $880,200 585,100 632,500 13,000 7,900 14,800 24 300 162,200 210,400 4.51 5.11 3.93 3.81 $ 29,800 55,600 398,000 180,000 98,300 $ 54/200 107,400 382,500 206,000 93 600 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. 1 W Complete this question by entering your answers in the tabs below. 1A Current 1A Acid Test 1A Acct Rec Ratio Ratio Turn For both companies compute the current ratio. (a) Current Ratio Company Choose Numerator: /Choose Denominator: Barco Kyan 1A Invent 1A Days Sal in 1A Days Sal Req 1B Short Turnover Inv Uncol term 1 1 1 || = = = Current Ratio Current ratio 0 to 1 0 to 1 1A Current 1A Acid Test 1A Acct Rec Ratio Ratio Turn For both companies compute the accounts (including notes) receivable turnover. Accounts Receivable Turnover Choose Denominator: Company Choose Numerator: 1 1 Barco Kyan 1A Invent 1A Days Sal in 1A Days Sal Req 1B Short Turnover Uncol term Inv 1 1 11 = = Accounts Receivable Turnover Accounts receivable turnover 0 times 0 times 1A Current 1A Acid Test 1A Acct Rec Ratio Ratio Turn 1A Invent 1A Days Sal in 1A Days Sal Req 1B Short Turnover Inv Uncol term For both companies compute the days' sales in inventory. (e) Company Choose Numerator: Barco Kyan Days' Sales in Inventory. / Choose Denominator: X Days 1 X 1 X X = = = Days' Sales in Inventory Days' sales in inventory 0 days 0 days Complete this question by entering your answers in the tabs below. 2A Prof Mar 2A Tot Asset 2A Ret on Tot Ratio Turn Assets For both companies compute the profit margin ratio. (a) Company Choose Numerator: 1 1 1 Barco Kyan 2A Ret On Com Stock 2A Price Earn 2A Div Yield Ratio Profit Margin Ratio Choose Denominator: = 11 11 Profit margin ratio Profit margin ratio % % Req 2B 1A Current Ratio For both companies compute the days' sales uncollected. 1A Acid Test 1A Acct Rec Ratio Turn (f) Company Choose Numerator: Barco Kyan 1A Invent Turnover 1A Days Sal in 1A Days Sal Inv Uncol Days' Sales Uncollected ! Choose Denominator: X Days 1 X X X = = = = Req 1B Short term Days' Sales Uncollected Days' sales uncollected 0 days 0 days 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On Com Stock Ratio Turn Assets For both companies compute the return on common stockholders' equity. (d) Company Barco Kyan Choose Numerator: 1 2A Price Earn Ratio F 1 2A Div Yield Return On Common Stockholders' Equity Choose Denominator Req 2B = = = Return On Common Stockholders' Equity Return on common stockholders' equity 2A Prof Mar 2A Tot Asset 2A Ret on Tot Ratio Turn Assets Assuming that share and each company's (f) Company Barco Kyan Choose Numerator: 1 1 1 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Choose Denominator: stock can be purchased at $75 per share, compute their dividend yields. Dividend Yield = Req 2B = Dividend Yield Dividend Yield % %