Homework Answers
Answer -
| Ratios | Barco Company | Kyan Company |
| Current Ratio | 2.53 | 2.55 |
| Acid test Ratio | 1.08 | 1.06 |
| Accounts (including notes) Receivable Turnover | 20.18 | 14.82 |
| Inventory Turnover | 8.36 | 5.27 |
| Day's Sales in Inventory | 53 days | 76 days |
| Day's Sales Uncollected | 22 days | 27 days |
Short term credit risk analysis :
Barco and Kyan have essentially equal current ratios and equal acid-test ratios. However, Barco both turns its merchandise and collects its accounts receivable more rapidly than does Kyan. On this basis, Barco probably is the better short-term credit risk.
| Ratios | Barco Company | Kyan Company |
| Profit Margin Ratio | 21.06% | 23.90% |
| Total Asset Turnover | 1.83 | 1.90 |
| Return on Total Assets | 38.46% | 45.49% |
| Return on Common Stockholder's Equity | 53.47% | 60.43% |
| Price Earnings Ratios | 16.62 | 14.68 |
| Dividend Yields | 5.08% | 5.24% |
Investment analysis :
Kyan's profit margin ratio, total asset turnover, return on total assets, and return on ordinary shareholders' equity are all higher than Barco’s. Although the companies pay the same dividend, Kyan's price-earnings ratio is lower. All of these factors suggest that Kyan's shares is likely the better investment.
Calculations :
1. Current ratio = Current assets / Current liabilities
Here,
Current assets = Cash + Accounts receivable (net) + Notes receivables + Merchandise inventory + Prepaid expenses
For Barco Company
Current ratio = 155440 / 61340
Current ratio = 2.53 : 1
For Kyan Company
Current ratio = 238050 / 93300
Current ratio = 2.55 : 1
2. Acid test ratio = (Cash + Accounts receivable (net) + Notes receivables) / Current liabilities
For Barco Company
Acid test ratio = (19500 + 37400 + 9100) / 61340
Acid test ratio = 1.08 : 1
For Kyan Company
Acid test ratio = (34000 + 57400+ 7200) / 93300
Acid test ratio = 1.06 : 1
3. Accounts (including notes) receivable turnover = Net sales / Average accounts receivable
Here,
Average (including notes) accounts receivable = [Accounts (including notes) receivable at beginning + Accounts (including notes) receivable at ending] / 2
For Barco Company
Average (including notes) accounts receivable = [29800 + 46500] / 2
Average (including notes) accounts receivable = 38150
For Kyan Company
Average (including notes) accounts receivable = [54200 + 64600] / 2
Average (including notes) accounts receivable = 59400
So,
For Barco Company
Accounts (including notes) receivable turnover = 770000 / 38150
Accounts (including notes) receivable turnover = 20.18
For Kyan Company
Accounts (including notes) receivable turnover = 880200 / 59400
Accounts (including notes) receivable turnover = 14.82
4. Inventory turnover = Cost of goods sold / Average inventories
Here,
Average inventories = [Inventory at beginning + Inventory at ending] / 2
For Barco Company
Average inventories = [55600 + 84440] / 2
Average inventories = 70020
For Kyan Company
Average inventories = [107400 + 132500] / 2
Average inventories = 119950
So,
For Barco Company
Inventory turnover = 585100 / 70020
Inventory turnover = 8.36
For Kyan Company
Inventory turnover = 632500 / 119950
Inventory turnover = 5.27
5. Day's sales in inventory = (Ending inventory / Cost of goods sold) * 365
For Barco Company
Day's sales in inventory = (84440 / 585100) * 365 days
Day's sales in inventory = 52.68 or 53 days
For Kyan Company
Day's sales in inventory = (132500 / 632500) * 365
Day's sales in inventory = 76.46 or 76 days
6. Day's sales uncollected = [(Ending accounts receivable + notes receivable) / Net sales] * 365
For Barco Company
Day's sales uncollected = [(37400 + 9100) / 770000] * 365 days
Day's sales uncollected = 22.04 or 22 days
For Kyan Company
Day's sales uncollected = [(57400 + 7200) / 880200] * 365
Day's sales uncollected = 26.79 or 27 days
7. Profit margin ratio = (Net income / Net sales) * 100
For Barco Company
Profit margin ratio = (162200 / 770000) * 100
Profit margin ratio = 21.06%
For Kyan Company
Profit margin ratio = (210400 / 880200) * 100
Profit margin ratio = 23.90%
8. Total asset turnover = Net sales / Average total asset
Here,
Average total asset = (Total asset at beginning + Total asset at ending) / 2
For Barco Company
Average total asset = (398000 + 445440) / 2
Average total asset = 441720
For Kyan Company
Average total asset = (382500 + 542450) / 2
Average total asset = 462475
So,
For Barco Company
Total asset turnover = 770000 / 421720
Total asset turnover = 1.83
For Kyan Company
Total asset turnover = 880200 / 462475
Total asset turnover = 1.90
9. Return on total asset = (Net income / Average total asset) * 100
Here,
Average total asset = (Total asset at beginning + Total asset at ending) / 2
For Barco Company
Average total asset = (398000 + 445440) / 2
Average total asset = 441720
For Kyan Company
Average total asset = (382500 + 542450) / 2
Average total asset = 462475
So,
For Barco Company
Return on total asset = (162200 / 421720) * 100
Return on total asset = 38.46%
For Kyan Company
Return on total asset = (2104400 / 462475) * 100
Return on total asset = 45.49%
10. Return on common stockholder's equity = (Net income / Common stockholder's equity + Retained earngings) * 100
For Barco Company
Return on common stockholder's equity = (162200 / 180000 + 123300) * 100
Return on common stockholder's equity = 53.47%
For Kyan Company
Return on common stockholder's equity = (210400 / 206000 + 142150) * 100
Return on common stockholder's equity = 60.43%
11. Price earning ratio = market value price per share / earning per share
For Barco Company
Price earning ratio = 75 / 4.51
Price earning ratio = 16.62
For Kyan Company
Price earning ratio = 75 / 5.11
Price earning ratio = 14.68
12. Dividend Yields = cash dividend per share / market value per share
For Barco Company
Dividend Yields = 3.81 / 75
Dividend Yields = 5.08%
For Kyan Company
Dividend Yields = 3.93 / 75
Dividend Yields = 5.24%
Add Answer to:
Barco Company Kyan Company Barco Company Kyan Company Data from the current year end balance sheets...
Barco Kyan Company Company Data from the current year-end balance sheets Assets Cash $ 19,000 $...
Barco Kyan Company Company Data from the current year-end balance sheets Assets Cash $ 19,000 $ 35,000 Accounts receivable, net 37,400 54,400 Merchandise inventory 84,340 134,500 Prepaid expenses 5,800 7,600 Plant assets, net 320,000 305, 400 Total assets $466,540 $536,900 Barco Kyan Company Company Data from the current year's income statement Sales $ 790,000 $901,200 cost of goods sold 591 100 640, 500 Interest expense 8,500 16,000 Income tax expense 15 185 24,879 Net income 175, 215 219,821 Basic earnings...
Barco Company Kyan Company Barco Company Kyan Company Data from the current year-end balance sheets Data from t...
Barco Company Kyan Company Barco Company Kyan Company Data from the current year-end balance sheets Data from the current year’s income statement Assets Sales $ 790,000 $ 900,200 Cash $ 19,500 $ 36,000 Cost of goods sold 587,100 640,500 Accounts receivable, net 33,400 50,400 Interest expense 8,200 16,000 Current notes receivable (trade) 9,800 8,000 Income tax expense 15,185 24,852 Merchandise inventory 84,540 128,500 Net income 179,515 218,848 Prepaid expenses 5,700 7,650 Basic earnings per share 5.28 4.45 Plant assets, net...
Barco Company Data from the current year-end balance sheets Kyan Company kyan Company Cash Accounts receivable,...
Barco Company Data from the current year-end balance sheets Kyan Company kyan Company Cash Accounts receivable, net Current notes receivable (trade) Merchandise Inventory Prepaid expenses Plant assets, net Total assets $ 21,000 $31.000 37,400 54,40 9,800 54,840 134,500 6,200 1,050 290.000 100.400 9443,2405542,350 Barco Company Data from the current year's Income statement Sales 600,000 Cost of goods sold 507,100 Interest expense ,300 Income tax expense 15,373 Net Income 139,223 Basic earnings per share Cash dividends per share 3.50 $920,200 63450...
Summary information from the financial statements of two companies competing in the same industry follows. ...
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 year’s 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...
Barco Куan Сompany Barco Куan Сompany Сompany Сопрany Data from the current year-end balance sheets Assets Data from th...
Barco Куan Сompany Barco Куan Сompany Сompany Сопрany Data from the current year-end balance sheets Assets Data from the current year's income statement Sales $790,000 $901,200 591 100 19,000 35,000 37,400 84,340 5,800 320,000 305,400 Cash Cost of goods sold Interest expense Income tax expense Net income 640,500 Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net 54,400 134,500 7,600 8,500 15 185 175,215 $.48 16,000 24,879 219,821 Basic earnings per share 5.09 $466,540 $536,900 Total assets Cash dividends...
[The following information applies to the questions displayed below.] Summary information from the financial statements of...
[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 year’s 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...
Summary information from the financial statements of two companies competing in the same industry follows. ...
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 year’s 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...
Summary information from the financial statements of two companies competing in the same industry follows. Problem...
Summary information from the financial statements of two companies competing in the same industry follows. Problem 13-5A Comparative ratio analysis A1P3 T Barco Company Kyan Company Barco Сотрату Kyan Сотрату Sales Data from the current year-end balance sheets Assets Cash ... $19,500 Accounts receivable, net 37.400 Current notes receivable (trade).... 9.100 Merchandise inventory.......... 84.440 Prepaid expenses 5.000 Plant assets, net... 290,000 Total assets.. $445,440 $ 34,000 57.400 7.200 132.500 6.950 304,400 $542.450 Data from the current year's income statement $770,000...
Fourth Attempt - Please show step-by-step calculations and what line items are used for the following...
Fourth Attempt - Please show step-by-step calculations and what line items are used for the following ratio calculation so it is easy to understand what numbers have been used: Note:Accounts Receivable Numbers used in 2nd and 3rd attempt that don't work are: Barco $37,400 and Kyan $57,400; 3rd attempt - $33600 - Barco and Kyan - $55,800. I have the remaining numbers that are correct. Summary information from the financial statements of two companies competing in the same industry follows....
The following information applies to the questions displayed below.] Summary information from the financial statements of...
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 year’s 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...
Barco Kyan Company Company Data from the current year-end balance sheets Assets Cash $ 19,000 $ 35,000 Accounts receivable, net 37,400 54,400 Merchandise inventory 84,340 134,500 Prepaid expenses 5,800 7,600 Plant assets, net 320,000 305, 400 Total assets $466,540 $536,900 Barco Kyan Company Company Data from the current year's income statement Sales $ 790,000 $901,200 cost of goods sold 591 100 640, 500 Interest expense 8,500 16,000 Income tax expense 15 185 24,879 Net income 175, 215 219,821 Basic earnings...
Barco Company Data from the current year-end balance sheets Kyan Company kyan Company Cash Accounts receivable, net Current notes receivable (trade) Merchandise Inventory Prepaid expenses Plant assets, net Total assets $ 21,000 $31.000 37,400 54,40 9,800 54,840 134,500 6,200 1,050 290.000 100.400 9443,2405542,350 Barco Company Data from the current year's Income statement Sales 600,000 Cost of goods sold 507,100 Interest expense ,300 Income tax expense 15,373 Net Income 139,223 Basic earnings per share Cash dividends per share 3.50 $920,200 63450...
Barco Куan Сompany Barco Куan Сompany Сompany Сопрany Data from the current year-end balance sheets Assets Data from the current year's income statement Sales $790,000 $901,200 591 100 19,000 35,000 37,400 84,340 5,800 320,000 305,400 Cash Cost of goods sold Interest expense Income tax expense Net income 640,500 Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net 54,400 134,500 7,600 8,500 15 185 175,215 $.48 16,000 24,879 219,821 Basic earnings per share 5.09 $466,540 $536,900 Total assets Cash dividends...
[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 year’s 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...
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 year’s 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...
Summary information from the financial statements of two companies competing in the same industry follows. Problem 13-5A Comparative ratio analysis A1P3 T Barco Company Kyan Company Barco Сотрату Kyan Сотрату Sales Data from the current year-end balance sheets Assets Cash ... $19,500 Accounts receivable, net 37.400 Current notes receivable (trade).... 9.100 Merchandise inventory.......... 84.440 Prepaid expenses 5.000 Plant assets, net... 290,000 Total assets.. $445,440 $ 34,000 57.400 7.200 132.500 6.950 304,400 $542.450 Data from the current year's income statement $770,000...
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