Problem 13-5A (Static) Comparative ratio analysis LO P3 Skip to question [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 Barco Company Kyan Company Data from the current year-end balance sheets Data from the current years income statement Assets Sales $ 770,000 $ 880,200 Cash $ 19,500 $ 34,000 Cost of goods sold 585,100 632,500 Accounts receivable, net 46,500 64,600 Interest expense 7,900 13,000 Merchandise inventory 84,440 132,500 Income tax expense 14,800 24,300 Prepaid expenses 5,000 6,950 Net income 162,200 210,400 Plant assets, net 290,000 304,400 Basic earnings per share 4.51 5.11 Total assets $ 445,440 $ 542,450 Cash dividends per share 3.81 3.93 Liabilities and Equity Beginning-of-year balance sheet data Current liabilities $ 61,340 $ 93,300 Accounts receivable, net $ 29,800 $ 54,200 Long-term notes payable 80,800 101,000 Merchandise inventory 55,600 107,400 Common stock, $5 par value 180,000 206,000 Total assets 398,000 382,500 Retained earnings 123,300 142,150 Common stock, $5 par value 180,000 206,000 Total liabilities and equity $ 445,440 $ 542,450 Retained earnings 98,300 93,600 Problem 13-5A (Static) 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 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 current ratio.

(a)	Current Ratio
Company	Numerator:	/	Denominator:	=	Current Ratio
		/		=	Current ratio
Barco		/		=	0	to 1
Kyan		/		=	0	to 1