Required information
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 yearend balance sheets Data from the current years income statement
Assets Sales $ $
Cash $ $ Cost of goods sold
Accounts receivable, net Interest expense
Merchandise inventory Income tax expense
Prepaid expenses Net income
Plant assets, net Basic earnings per share
Total assets $ $ Cash dividends per share
Liabilities and Equity Beginningofyear balance sheet data
Current liabilities $ $ Accounts receivable, net $ $
Longterm notes payable Merchandise inventory
Common stock, $ par value Total assets
Retained earnings Common stock, $ par value
Total liabilities and equity $ $ Retained earnings
Required:
a For both companies compute the a current ratio, b acidtest ratio, c accounts receivable turnover, d inventory turnover, e days sales in inventory, and f days sales uncollected.
Note: Do not round intermediate calculations.
b Identify the company you consider to be the better shortterm credit risk.