Question

Summary information from the financial statements of two companies competing in the same industry follows. Barco Kyan Company Company Data from the current year and balance sheets Assets Cash $ 21,000 $31.000 Accounts receivable, et 37.400 54,400 Current notes receivable (trade) 9,800 3.200 Merchandise inventory 84,840 134,500 Prepaid expenses 6,200 2,850 Plant annets, net 290,000 306,400 Total assets $449,240 $542,350 Barco Kyan Company Coepany Data from the current year's income statement Sales $800,000 $920,200 cost of goods sold 587,100 634.500 Interest expense 8.300 11.000 Income tax expense 15.377 25,404 Net income 189.22) 209,296 Basie earnings per share 4.30 5.28 Cash dividends per share 3.80 3.95 $ 26,800 $ 58,200 Liabilities and Equity Current liabilities Tong-term notes payable Connon stock, $5 par value Retained earnings Total liabilities and equity $ 68,340 $ 94,300 79.800 113,000 220.000 236,000 81,100 99,050 $449,240 $542,350 Beginning-of-year balance sheet data Accounts receivable, net Current notes receivable (trade) Merchandise inventory Total assets Common stock, SS par value Retained earnings 65,600 398,000 220,000 59,077 111,400 422,500 236.000 36,194 Required: 1a. For both companies compute the current ratio, () acid-test ratio, id accounts (including notes) receivable turnover. Id Inventory turnover, (e) days' sales in inventory, and (6 days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be better short-term credit risk. Complete this question by entering your answers in the tabs below. 1A Current Ratio A Acid Test Ratio A Act Rec Turn 1A Invent Turnover 1A Days Salin in A Days Sol Uncol For both companies compute the current ratio. Comany Chase Numerator Current Ratio Chinese Nenominator Current Ratio

Answer 1