Question: i need help with this problem Required information [The following information applies to the questions displayed below.) Summary information from the financial statements of two







Required information [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 Company Kyan Company Data from the current year-end balance sheets Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, not Total assets Barco Kyan Company Company Data from the current year's income statement Sales $ 19,500 $ 34,000 Cost of goods sold 46,500 64,600 Interest expense 84,440 132,500 Income tax expense 5,000 6,950 Net Income 290,000 304,400 Basic earnings per share $ 445,440 $ 542,450 Cash dividende per share Beginning of year balance sheet data $ 61,340 $ 93,300 Accounts receivable, net 30,300 101,000 Merchandise inventory 130,000 206,000 Total assets 123,300 142,150 Common stock, $5 par value 5 445,440 542,450 Retained earnings $ 270,000 585,100 7,900 14,000 162,200 4.51 3.81 $ 880, 200 632,500 13,000 24,300 210,400 5.11 3.97 Liabilities and Equity Current liabilities Long tere notes payable Common stock, 35 par value Retained earnings Total liabilities and equity $ 29,000 55,600 398,000 180,000 98,100 $ 54,200 107,400 382,500 206,00 Required: 10. For both companies compute the (a) current ratio, (b) acid test ratio. (accounts receivable turnover, (d) inventory turnover. (e) days! sales in inventory, and (days' sales uncollected. (Do nor 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 1A Acid Test 1A Acct Rec 1A Invent 1A Days Sal in 1A Days Sal 1B short term Ratio Ratio Turn Turnover Inv Uncol For both companies compute the current ratio. (a) Current Ratio Company Numerator: Denominator: Current Ratio Current assets Current liabilities Current ratio Barco S 155,440 $ 61,340 2.5 to 1 Kyan $ 238,050 $ 93 300 2.6 to 1 A Cuent Ratio 1A Acid Test Ratio > 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover LA Days Sal in 1A Days Sal Inv Uncol 1B short term Acid-Test Ratio For both companies compute the acid-test ratio. (b) Company Numerator: Cash Current assets Barco $ 19,500 Kyan $ 34,000 Current receivables 66,000 $ 98,600 Denominator: 1 Current liabilities S 61,340 = S 93,3001 - Acid-Test Ratio Acid.tostrato 1.4 to 1 1.4 to 1 . + + 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in 1A Days Sal Iny Uncol 18 short term ces For both companies compute the accounts (including notes) receivable turnover. (c) Accounts Receivable Turnover Company Numerator Denominator: Accounts Receivable Turnover Accounts receivable turnover Barco 0 times O times Kyan 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 inventory turnover. (d) Company Inventory. Turnover Denominator: Numerator Inventory Turnover Inventory turnover Barco O times Oltimos Kyan 1A Current Ratio IA Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Salin Inv 1A Days Sal Uncol 1B short term For both companies compute the days' sales in Inventory. Days Sales in Inventory Company Numerator: 1 Denominator: Days Days' Sales In Inventory Days' sales in inventory 0 days 0 days Barco X 1 1 Kyan 1A Invent Turnover 1A Days Sal Uncol > 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 days' sales uncollected. (9 DaysSales Uncollected Company Numerator: Denominator: x Days Days' Sales Uncollected Days' sales uncollected o days Barco Kyan o days Identify the company you consider to be the better short-term credit risk. Better short-term credit risk
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