Summary information from the financial statements of two companies competing in the same industry follows. Barco Kyan Company Company Data from the current year-end balance sheets Assets Cash $ 22,000 $ 30,000 Accounts receivable, net 36,400 57,400 Merchandise inventory 84,740 132,500 Prepaid expenses 5,200 7,550 Plant assets, net 370,000 312,400 Total assets $518, 340 $539,850 Barco Kyan Company Company Data from the current year's income statement Sales $ 780,000 $916,200 Cost of goods sold 587,100 650,500 Interest expense 8,000 10,000 Income tax expense 14,992 25,294 Net income 169,908 230, 406 Basic earnings per share 4.25 5.33 Cash dividends per share 3.71 3.99 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 60,340 $ 99,300 82,800 107,000 200,000 216,000 175,200 117,550 $518, 340 $539,850 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 29,800 $ 56,200 57,600 107,400 438,000 392,500 200,000 216,000 153,692 59,512 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 (1) days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be the better short-term credit risk. Complete this question by entering your answers in the tabs below. 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 current ratio. (a) Company Choose Numerator: Current Ratio Choose Denominator: = Current Ratio Current ratio Barco Kyan to 1 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 18 short term For both companies compute the acid-test ratio. Acid-Test Ratio . (b) Company Choose Numerator: Choose Denominator: = Acid-Test Ratio Acid-test ratio to 1 Barco Kyan to 1 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 accounts (including notes) receivable turnover. (c) Company Choose Numerator: Accounts Receivable Turnover 1 Choose Denominator: = Accounts Receivable Turnover Accounts receivable turnover Barco times Kyan times Complete this question by entering your answers in the tabs below. 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 18 For both companies compute the inventory turnover. (d) Inventory Turnover I Choose Denominator: Company Choose Numerator: Inventory Turnover Inventory turnover Barco times Kyan times 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 days' sales in inventory. Days' Sales in Inventory Choose Denominator: x Company Choose Numerator: Days = Days' Sales in Inventory = Days' sales in inventory days 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. (f) Company Choose Numerator: Days' Sales Uncollected 1 Choose Denominator: x Days ninator = Days' Sales Uncollected = Days' sales uncollected days 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 13 short term Identify the company you consider to be the better short-term credit risk. Better short-term credit risk