Question

Required information The following information applies to the questions displayed below.j Summary information from the financial statements of two companies competing in the same industry follows Barco an Barco Kvan Company Company Company Company Data from the current year-end balance sheets Assets Cash Accounts receivable, net Current notes receivable (trade) Merchandise inventory Prepaid expenses Plant assets, net Total assets Data from the current year's income statement 84 900 Sale 84,240 132,500 Net income $770,000 $913,200 595,100 650,500 8,300 12, 000 14,80025,211 151,800 225,489 4.99 3.98 $ 20,500 32,000 Cost of goods sold 34,400 57,400 Interest expense 9,900 8,600 Income tax expense 5,500 7,000 Basic earnings per share 3.99 3.72 320,000 305,400 Cash dividends per share $474,540 $542,900 Beginning-of-year balance sheet data Accounts receivable, net $ 27,800 58,200 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity 65,340 93,300 Current notes receivable (trade) 55,600 107,400 418,000 382,500 190,000 226,000 123,960 77,007 84,800 101,000 Merchandise inventory 190,000 226,000 Total assets 134,400 122,600 Common stock, $5 par value $474,540 $542,900 Retained earnings Required 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) receivable turnover, (d) inventory turnover, (e) days' sales in inventory, and (n days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be better short-term credit risk.

Answer 1