Required information Problem 13-5A Comparative ratio analysis LO A1, P3 [The following information applies to the questions displayed below.) 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 $ 19,500 $ 37,000 Accounts receivable, net 39,400 55,400 Current notes receivable (trade) 9,800 8,000 Merchandise inventory 84,640 132,500 Prepaid expenses 5,300 7,650 Plant assets, net 310,000 1304,400 Total assets $468,640 $544,950 Data from the current years Sales cost of goods sold Interest expense Income tax expense Net income Basic earnings per share Cash dividends per share Barco Kyan Company Company Income statement $780,000 $905,200 585,100 644,500 8,100 17,000 14,992 24,990 171,808 218,710 5.05 4.84 3.73 $ 28,800 $ 56,200 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 69,340 $ 95,300 82,800 103,000 170,000 226,000 146,500 120,650 $468,640 $544,950 Beginning-of-year balance sheet data Accounts receivable, net Current notes receivable (trade) Merchandise inventory Total assets Common stock, $5 par value Retained earnings 61,600 418,000 170,000 101,512 113,400 372,500 226,000 82,740 Problem 13-5 Part 1 Required: a. For both companies compute the () current ratio, (o) acid-test ratio, (d accounts (including notes) receivable turnover (o inventory curnover, (e) days' sales in inventory, and (7 days' sales uncollected. (Do not round intermediate calculations.) b. Identify the company you consider to be better short-term credit risk. 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including nu turnover, (e) days' sales in inventory, and (1 days' sales uncollected. (Do not round Intermediate 1b. Identify the company you consider to be 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 Req 1B For both companies compute the current ratio. (a) Current Ratio 7 Choose Denominator: Current liabilities Current Ratio Current ratio Company Choose Numerator: Current assets Barco Kyan 0 to 1 0 to 1 1A Acid Test Ratio > Problem 13-5 Part 1 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, ( accounts (including notes) 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 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 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol Turn Reg 1B For both companies compute the acid-test ratio. Acid-Test Ratio (b) Company Cash Choose Numerator: Choose Denominator: / Current liabilities Current receivables - Acid-Test Ratio = Acid-test ratio O to 1 Barco 0 to 1 Kyan 1A Current Ratio 1A Acct Rec Turn > turnovere days sales in inventory, and (n) days' sales uncollected. (Do not round intermediate calcu 1b. Identify the company you consider to be 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 Req 1B For both companies compute the accounts (including notes) receivable turnover. (c) Accounts Receivable Turnover Company Choose Numerator: / Choose Denominator: - Accounts Receivable Turnover Net sales 1 Average accounts receivable, net = Accounts receivable turnover Barco O times Kyan 0 times 1A Acid Test Ratio 1A Invent Turnover > 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 For both companies compute the inventory turnover. (d) Company Choose Numerator: Cost of goods sold Barco Kyan Inventory Turnover Choose Denominator: Average inventory 1 = = Inventory Turnover Inventory turnover 0 times 0 times 1A Acct Rec Turn 1A Days Sal in Inv > 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) rece turnover, (e) days' sales in inventory, and ( days' sales uncollected. (Do not round intermediate calculati 1b. Identify the company you consider to be 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 Req 1B For both companies compute the days' sales in inventory. Days' Sales in Inventory Choose Denominator: x Cost of goods sold Days 365 Company Choose Numerator: Merchandise inventory Barco Kyan = Days' Sales in Inventory = Days' sales in inventory 0 days 0 days Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) receive turnover. (e) days' sales in inventory, and (days' sales uncollected. (Do not round intermediate calculation 1b. Identify the company you consider to be 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 Req 1B For both companies compute the days' sales uncollected. Days Sales Uncollected 1 Choose Denominator: / Net sales Days 365 Company Choose Numerator: Current receivables, net Barco Kyan = Days' Sales Uncollected = Days' sales uncollected 0 days 0 days