Check 7 Required information Problem 13-5A (Algo) Comparative ratio analysis LO P3 [The following information applies to the questions displayed below. Part 1 of 2 Summary information from the financial statements of two companies competing in the same industry follows. 10 points Barco Company Kyan Company Barco Company Kyan Company eBook Data from the current year-end balance sheets Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets References $ 20,000 $ 37,000 37,400 57,400 84,440 136,500 5,900 7,800 280,000 313,400 $ 427,740 $ 552,100 Data from the current year's income statement Sales 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 $ 790,000 587,100 9,100 15,185 178,615 4.25 3.75 $ 880, 200 630, 500 12,000 24,300 213,400 5.18 3.92 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 62,340 $ 94,300 85,800 107,000 210,000 206,000 69,600 144,800 $ 427,740 $ 552,100 $ 26,800 55,600 398,000 210,000 48,485 $ 53,200 111,400 372,500 206,000 92,904 Problem 13-5A (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 (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 1A Days Sal Inv Uncol 1B short term For both companies compute the current ratio. (a) Company Current Ratio Denominator: Numerator: = 11 1 / Current Ratio Current ratio to 1 to 1 11 Barco Kyan 1 II 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 acid-test ratio. Acid-Test Ratio (b) Company Numerator: Denominator: = Acid-Test Ratio Acid-test ratio + Barco + to 1 Kyan 1 to 1 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 accounts (including notes) receivable turnover. (c) Company Accounts Receivable Turnover Denominator: Numerator: 1 Accounts Receivable Turnover Accounts receivable turnover times times 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 inventory turnover. (d) Inventory Turnover Denominator: Company Numerator: Inventory Turnover Inventory turnover = Barco times Kyan 1 times 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 days' sales uncollected. (f) Days' Sales Uncollected Denominator: Company Numerator: 1 X Days = Days' Sales Uncollected Days' sales uncollected days days Barco / Kyan 1 Complete this question by entering your answers in the tabs below. 1A Current Ratio 1A Acid Test 1A Acct Rec Ratio Turn 1A Invent 1A Days Sal in 1A Days Sal Turnover Uncol 1B short term Inv Identify the company you consider to be the better short-term credit risk. Better short-term credit risk