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.

Note: Do not round intermediate calculations.

1b. Identify the company you consider to be the better short-term credit risk.

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

	Barco Company	Kyan Company		Barco Company	Kyan Company
Data from the current year-end balance sheets			Data from the current year's income statement
Assets			Sales	$ 800,000	$ 918,200
Cash	$ 18,000	$ 37,000	Cost of goods sold	595,100	634,500
Accounts receivable, net	37,400	53,400	Interest expense	8,600	16,000
Merchandise inventory	84,240	142,500	Income tax expense	15,377	25,349
Prepaid expenses	5,600	7,250	Net income	180,923	242,351
Plant assets, net	320,000	306,400	Basic earnings per share	4.11	4.93
Total assets	$ 465,240	$ 546,550	Cash dividends per share	3.82	3.92
Liabilities and Equity			Beginning-of-year balance sheet data
Current liabilities	$ 61,340	$ 95,300	Accounts receivable, net	$ 27,800	$ 57,200
Long-term notes payable	81,800	111,000	Merchandise inventory	57,600	105,400
Common stock, $5 par value	220,000	246,000	Total assets	408,000	372,500
Retained earnings	102,100	94,250	Common stock, $5 par value	220,000	246,000
Total liabilities and equity	$ 465,240	$ 546,550	Retained earnings	89,257	44,763