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		$	919,200
Cash	$	21,000		$	37,000			Cost of goods sold		588,100			642,500
Accounts receivable, net		39,400			54,400			Interest expense		8,100			19,000
Current notes receivable (trade)		9,200			7,200			Income tax expense		14,992			25,376
Merchandise inventory		84,340			132,500			Net income		168,808			232,324
Prepaid expenses		5,500			7,600			Basic earnings per share		4.22			4.92
Plant assets, net		340,000			310,400			Cash dividends per share		3.72			3.95
Total assets	$	499,440		$	549,100
								Beginning-of-year balance sheet data
Liabilities and Equity								Accounts receivable, net	$	27,800		$	51,200
Current liabilities	$	61,340		$	92,300			Current notes receivable (trade)		0			0
Long-term notes payable		80,800			105,000			Merchandise inventory		65,600			109,400
Common stock, $5 par value		200,000			236,000			Total assets		418,000			382,500
Retained earnings		157,300			115,800			Common stock, $5 par value		200,000			236,000
Total liabilities and equity	$	499,440		$	549,100			Retained earnings		137,292			69,916

Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) 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 better short-term credit risk.

& Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. 1A Current Ratio 1A Acid Test Ratio F 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in 1A Days Sal Uncol Req 1B Inv For both companies compute the acid-test ratio. Acid-Test Ratio I (b) Company Choose Denominator: = Acid-Test Ratio Cash Current liabilities Acid-test ratio + Choose Numerator: Short-term investments $ 39,400 X $ 54,400 $ + Barco Kyan 61,340 Current receivables 9,200 * 1 7,200 X 1 $ $ 21,000 37,000 + + 1.1 1.1 to 1 to 1 92,300 + Accounts Receivable Turnover (c) Company Choose Numerator: , Accounts Receivable Turnover Net sales Choose Denominator: Average accounts receivable, net $ 27,800 X = S Barco 567,120 X 829,440 Accounts receivable turnover 20.4 times 16.2 times Kyan $ 51,200 X 1A Acid Test Ratio 1A Invent Turnover > For both companies compute the inventory turnover. (d) Inventory Turnover Company Inventory Turnover Inventory turnover Choose Numerator: Cost of goods sold 588,100 $ 642,500 Choose Denominator: = Average inventory 75,397 X = $ 121,226 X = 7.8 times Barco Kyan 5.3 times Days' Sales Uncollected Choose Denominator: Company ys' Sales Uncollected Choose Numerator: Current receivables, Net sales net 365 365 Barco 48,510 61,700 $ $ 780,000 919,200 X x = = = Days' sales uncollected 1 22.7 days 24.5 days Kyan 365