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

Required
1. 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.
Identify the company you consider to be the better short-term credit risk and explain why. Round to one decimal place.
2. For both companies compute the
(a) Profit margin ratio,
(b) Total asset turnover,
(c) Return on total assets, and
(d) Return on common stockholders’ equity. Assuming that each company paid cash dividends of $ 3.80 per share and each company’s stock can be purchased at $ 75 per share, compute their (e) Price-earnings ratios
(f) Dividend yields. Round to one decimal place. Identify which company’s stock you would recommend as the better investment and explainwhy.

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Barco Kyan Company Company Data from the current year-end balance sheets Assets Cash. Accounts receivable, net Current notes receivable (trade) .. Merchandise inventory 1 $ 9,500 34,000 57,400 7,200 132,500 6,950 304,400 . 37,400 9,100 84,440 5,000 290,000 Plant assets, net . Total assets...A$445,440 $542,450 Liabilities and Equity Current liabilities... 61,340 93.300 01.000 206,000 142,150 $542.450 80,800 Common stock. $5 par value Retained earnings .. . ..80,000 123,300 Total liabilities and equity$445,440 Data from the current year's income statement 585.100 7.900 14800 162,200 4.51 632,500 13,000 24,300 210.400 5.11 Interest expense Income tax expense Basic earnings per share Beginning-of-year balance sheet data Accounts receivable, net. Current notes receivable (trade) .. $29.800 54.200 55,600 398,000 180.000 98.300 07.400 382,500 206,000 93.600 Common stock. $5 par value Retained earnings. . ..