11 Required information Problem 17-5A (Algo) Comparative ratio analysis LO P3 t 1 of 2 [The following information applies to the questions displayed below.] Summary information from the financial statements of two companies competing in the same industry follows. 5 ts Barco Company Kyan Company Barco Kyan Company Company Data from the current year-end balance sheets Data from the current year's income statement Assets Sales $ 810,000 $ 882,200 eBook Prepaid expenses Cash $ 19,500 $ 38,000 Accounts receivable, net Merchandise inventory Plant assets, net Print eferences Total assets Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 496,440 $ 533,300 $ 496,440 $ 62,340 $ 97,300 79,800 180,000 174,300 115,000 206,000 115,000 36,400 84,640 5,900 350,000 50,400 134,500 7,000 303,400 $ 533,300 Cost of goods sold Interest expense Income tax expense Net income Basic earnings per share Cash dividends per share Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings 592,100 8,400 644,500 15,569 193,931 5.39 3.74 17,000 24,355 196,345 4.77 3.98 $ 25,800 $ 51,200 55,600 109,400 418,000 392,500 180,000 206,000 115,009 82,631 Problem 17-5A (Algo) Part 1 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 (f) days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be the better short-term credit risk. 1A Current 1A Acid Test Ratio Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in 1A Days Sal 1B short term Inv Uncol For both companies compute the current ratio. (a) Company Barco Kyan Numerator: Current Ratio Denominator: = Current Ratio = Current ratio = 0 to 1 = 0 to 1 For both companies compute the acid-test ratio. (b) Company Barco Kyan Numerator: + + + + + + Acid-Test Ratio Denominator: = Acid-Test Ratio || = Acid-test ratio 0 to 1 0 to 1 For both companies compute the accounts (including notes) receivable turnover. Accounts Receivable Turnover (c) Company Numerator: 1 Barco Kyan / Denominator: = Accounts Receivable Turnover = Accounts receivable turnover = = II 0 times 0 times For both companies compute the inventory turnover. (d) Company Numerator: Barco Kyan Inventory Turnover Denominator: = Inventory Turnover = Inventory turnover = 0 times 0 times For both companies compute the days' sales in inventory. (e) Company Numerator: Days' Sales in Inventory. Denominator: Barco Kyan Days x II = = II II Days' Sales in Inventory Days' sales in inventory 0 days 0 days For both companies compute the days' sales uncollected. (f) Company Numerator: Days' Sales Uncollected Denominator: Barco Kyan Days = Days' Sales Uncollected || II = Days' sales uncollected 0 days 0 days