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	$ 780,000	$ 922,200
Cash	$ 22,500	$ 36,000	Cost of goods sold	584,100	634,500
Accounts receivable, net	34,400	54,400	Interest expense	8,300	12,000
Merchandise inventory	84,240	130,500	Income tax expense	14,992	25,459
Prepaid expenses	6,100	6,950	Net income	172,608	250,241
Plant assets, net	350,000	303,400	Basic earnings per share	4.79	5.30
Total assets	$ 497,240	$ 531,250	Cash dividends per share	3.80	3.93
Liabilities and Equity			Beginning-of-year balance sheet data
Current liabilities	$ 65,340	$ 102,300	Accounts receivable, net	$ 31,800	$ 51,200
Long-term notes payable	79,800	117,000	Merchandise inventory	61,600	111,400
Common stock, $5 par value	180,000	236,000	Total assets	438,000	362,500
Retained earnings	172,100	75,950	Common stock, $5 par value	180,000	236,000
Total liabilities and equity	$ 497,240	$ 531,250	Retained earnings	136,292	11,205

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.

Note: Do not round intermediate calculations.

1b. Identify the company you consider to be the better short-term credit risk.

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 $80 per share, compute their (e) price-earnings ratios and (f) dividend yields.

2b. Identify which companys stock you would recommend as the better investment.