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Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (

Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 48CE
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Required: la. 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. Complete this question by entering your answers in the tabs below. 1A Acid Test 1A Acct Rec Ratio 1A Invent 1A Days Sal in 1A Days Sal Turnover 1A Current 1B short term Ratio Turn Inv Uncol For both companies compute the acid-test ratio. (b) Acid-Test Ratio = Acid-Test Ratio Company Cash Choose Numerator: Choose Denominator: Short-term investments Current receivables I Current liabilities Acid-test ratio + + = 19,500 + 61,340 93,300 Barco $ + to 1 Кyan $ 34,000 to 1 + + = < 1A Current Ratio 1A Acct Rec Turn >
Transcribed Image Text:Required: la. 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. Complete this question by entering your answers in the tabs below. 1A Acid Test 1A Acct Rec Ratio 1A Invent 1A Days Sal in 1A Days Sal Turnover 1A Current 1B short term Ratio Turn Inv Uncol For both companies compute the acid-test ratio. (b) Acid-Test Ratio = Acid-Test Ratio Company Cash Choose Numerator: Choose Denominator: Short-term investments Current receivables I Current liabilities Acid-test ratio + + = 19,500 + 61,340 93,300 Barco $ + to 1 Кyan $ 34,000 to 1 + + = < 1A Current Ratio 1A Acct Rec Turn >
Summary information from the financial statements of two companies competing in the same industry follows. Barco Company Data from the current year-end balance sheets Кyan Company Barco Кyan Company Company Data from the current year's income statement Sales Cost of goods sold Interest expense Income tax expense Net income $770,000 $880,200 632,500 13,000 24,300 210,400 5.11 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net $ 19,500 $ 34,000 46,500 84,440 5,000 290, 000 585,100 7,900 64,600 132,500 6,950 304,400 14,800 162,200 4.51 Basic earnings per share Total assets $445,440 $542,450 Cash dividends per share 3.81 3.93 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets $ 61,340 $ 93,300 55,600 398,000 180,000 $ 29,800 $ 54,200 107,400 382,500 206,000 93,600 80,800 180,000 123,300 101,000 206,000 142,150 Common stock, $5 par value Total liabilities and equity $445,440 $542,450 Retained earnings 98,300
Transcribed Image Text:Summary information from the financial statements of two companies competing in the same industry follows. Barco Company Data from the current year-end balance sheets Кyan Company Barco Кyan Company Company Data from the current year's income statement Sales Cost of goods sold Interest expense Income tax expense Net income $770,000 $880,200 632,500 13,000 24,300 210,400 5.11 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net $ 19,500 $ 34,000 46,500 84,440 5,000 290, 000 585,100 7,900 64,600 132,500 6,950 304,400 14,800 162,200 4.51 Basic earnings per share Total assets $445,440 $542,450 Cash dividends per share 3.81 3.93 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets $ 61,340 $ 93,300 55,600 398,000 180,000 $ 29,800 $ 54,200 107,400 382,500 206,000 93,600 80,800 180,000 123,300 101,000 206,000 142,150 Common stock, $5 par value Total liabilities and equity $445,440 $542,450 Retained earnings 98,300
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