Required information [The following information applies to the questions displayed below.] Summary information from the financial...

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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 Barco Company Kyan Company Data from the current year-end Data from the current year's balance sheets income statement Assets Sales $770,000 $ 907,200 Cash $ 18,000 $ 30,000 Accounts receivable, net 39,400 50,400 Cost of goods sold Interest expense. 592,100 648,500 8,300 19,000- Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities. Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 497,840 $528,750 $ 65,340 $ 104,300 85,040 132,500 Income tax expense 14,800 25,045 5,400 350,000 7,450 Net income 154,800 214,655 308,400 Basic earnings per share 4.30 5.48 Cash dividends per share 3.82 3.99 Beginning-of-year balance sheet data Accounts receivable, net $ 28,800 $ 53,200 83,800 109,000 Merchandise inventory 59,600 107,400 180,000 196,000 Total assets: 378,000 382,500 168,700 119,450 Common stock, $5 par value 180,000 196,000 $ 497,840 $ 528,750 Retained earnings 151,420 61,203 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 (5) days' sales uncollected. Note: Do not round intermediate calculations. 1b. Identify the company you consider to be the better short-term credit risk. Katio For both companies compute the current ratio. (a) Company Barco Kyan Numerator: Current Ratio Denominator: = Current Ratio = Current ratio = to 1 to 1 34 Currant Ratin 14 Acid Test Patio For both companies compute the acid-test ratio. (b) Company Barco Kyan Numerator: + + Acid-Test Ratio Denominator: Acid-Test Ratio Acid-test ratio to 11 to 1 companies compute the account (including notes) Accounts Receivable Turnover (c) Company Numerator: Barco Kyan 1 Denominator: = Accounts Receivable Turnover Accounts receivable turnover times times For both companies compute the inventory turnover. (d) Company Numerator: Barco Kyan Inventory Turnover Denominator: = = Inventory Turnover Inventory turnover times times. For both companies compute the days' sales in inventory. (e) Company Numerator: Days' Sales in Inventory Denominator: Barco Kyan 14 Jovent Turnover x Days x x x = Days' Sales in Inventory Days' sales in inventory = days days Katio Turn Turnover 1B short term Inv Uncol For both companies compute the days' sales uncollected. 3 ces Days' Sales Uncollected Company Barco Kyan Numerator: 1 Denominator: Days= x x M Days' Sales Uncollected Days' sales uncollected days days Identify the company you consider to be the better short-term credit risk. Better short-term credit risk 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 Barco Company Kyan Company Data from the current year-end Data from the current year's balance sheets income statement Assets Sales $770,000 $ 907,200 Cash $ 18,000 $ 30,000 Accounts receivable, net 39,400 50,400 Cost of goods sold Interest expense. 592,100 648,500 8,300 19,000- Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities. Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 497,840 $528,750 $ 65,340 $ 104,300 85,040 132,500 Income tax expense 14,800 25,045 5,400 350,000 7,450 Net income 154,800 214,655 308,400 Basic earnings per share 4.30 5.48 Cash dividends per share 3.82 3.99 Beginning-of-year balance sheet data Accounts receivable, net $ 28,800 $ 53,200 83,800 109,000 Merchandise inventory 59,600 107,400 180,000 196,000 Total assets: 378,000 382,500 168,700 119,450 Common stock, $5 par value 180,000 196,000 $ 497,840 $ 528,750 Retained earnings 151,420 61,203 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 (5) days' sales uncollected. Note: Do not round intermediate calculations. 1b. Identify the company you consider to be the better short-term credit risk. Katio For both companies compute the current ratio. (a) Company Barco Kyan Numerator: Current Ratio Denominator: = Current Ratio = Current ratio = to 1 to 1 34 Currant Ratin 14 Acid Test Patio For both companies compute the acid-test ratio. (b) Company Barco Kyan Numerator: + + Acid-Test Ratio Denominator: Acid-Test Ratio Acid-test ratio to 11 to 1 companies compute the account (including notes) Accounts Receivable Turnover (c) Company Numerator: Barco Kyan 1 Denominator: = Accounts Receivable Turnover Accounts receivable turnover times times For both companies compute the inventory turnover. (d) Company Numerator: Barco Kyan Inventory Turnover Denominator: = = Inventory Turnover Inventory turnover times times. For both companies compute the days' sales in inventory. (e) Company Numerator: Days' Sales in Inventory Denominator: Barco Kyan 14 Jovent Turnover x Days x x x = Days' Sales in Inventory Days' sales in inventory = days days Katio Turn Turnover 1B short term Inv Uncol For both companies compute the days' sales uncollected. 3 ces Days' Sales Uncollected Company Barco Kyan Numerator: 1 Denominator: Days= x x M Days' Sales Uncollected Days' sales uncollected days days Identify the company you consider to be the better short-term credit risk. Better short-term credit risk