Summary information from the financial statements of two companies competing in the same industry follows.

Summary Information from the financial statements of two companies competing in the same Industry follows. Barco Kyan Barco Kyan Company Company Company Company Data from the current year-end balance sheets Data from the current year's income statement Assets Sales $810,000 $886,200 Cash $ 22,000 $ 35,000 Coat of goods sold 595,100 650,500 Accounts receivable, net 36,400 51,400 Interest expense 7.900 12.000 Merchandise inventory 84,840 136.500 Income tax expense 15,56924,465 Prepaid expenses 5.600 6.950 Net income 191,431 199, 235 Plant asseta, net 310,000 306,400 Basie earnings per share 5.04 4.61 Total assets $458,840 $536,250 Cash dividends per share 3.73 3.91 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity Beginning-of-year balance sheet data $ 64,340 $ 92,300 Accounts receivable, net 79, 800 109,000 Merchandise inventory 190,000 216,000 Total assets 124,700 119,950 Common stock, $5 par value 9450,040 0536,250 Retained earnings $ 28,800 $ 54,200 63,600 109,400 438,000 412,500 190,000 216,000 75,00988,627 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Iny 1A Days Sal Uncol 1B short term For both companies compute the current ratio. Current Ratio I Choose Denominator: Current liabilities Company Choose Numerator: Current assets Barco Kyan Current Ratio Current ratio 0 to 1 0 to 1 K IA Current Ratio 1A Acid Test Ratio > 1A Current Rustio 1A Acid Test Ratio 1A Acct Rec Tum 1A Invent Turnover 1A Days Sal in Iny 1A Days Sal Uncol 13 short term For both companies compute the acid-test ratio. Acid-Test Ratio Company Choose Numerator Choose Denominator Acid-Test Ratio Acid-test ratio O to 1 O to 1 Barco Kyan ( 1A Current Ratio 1A Acct Rec Turn > 1A Current Ratio 1A Acid Test Ratio 1A Act Rec Turn 1 A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term For both companies compute the accounts (including notes) receivable turnover. (c) Company Choose Numerator: Accounts Receivablo Turnover Choose Denominator: - Accounts Recolvable Turnover - Accounts receivable turnover O times Barco Kyan 0 times 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term For both companies compute the inventory turnover. (d) Company Choose Numerator: Inventory Turnover 1 Choose Denominator: = - Inventory Turnover Inventory turnover 0 times Barco Kyan 0 times 1A Acct Rec Turn 1A Days Sal in Iny > 1A Acct Rec 1A Current Ratio 1A Acid Test Ratio 1A Invent Turnover 1A Days Sal in Iny 1A Days Sal Uncol 18 short term Turn For both companies compute the days' sales in Inventory. (0) Company Choose Numerator: Days' Sales in Inventory Choose Denominator: * Days - Days' Sales In Inventory Days' sales in inventory 0 days 0 days 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 1B short term For both companies compute the days' sales uncollected. Days' Sales Uncollected Choose Denominator: x Company Choose Numerator: Days - Days' Sales Uncollected Days' sales uncollected 0 days o days Barco Kyan 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term Identify the company you consider to be the better short-term credit risk. Better short-term credit risk al Uncol 18 short term > Barco company Kyan company