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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 years income statement Assets Sales $ 810,000 $ 923,200 Cash $ 20,000 $ 35,000 Cost of goods sold 589,100 636,500 Accounts receivable, net 35,400 51,400 Interest expense 9,300 11,000 Current notes receivable (trade) 9,000 8,400 Income tax expense 15,569 25,487 Merchandise inventory 84,940 140,500 Net income 196,031 250,213 Prepaid expenses 5,200 7,600 Basic earnings per share 5.16 5.54 Plant assets, net 280,000 313,400 Cash dividends per share 3.79 3.97 Total assets $ 434,540 $ 556,300 Beginning-of-year balance sheet data Liabilities and Equity Accounts receivable, net $ 30,800 $ 51,200 Current liabilities $ 61,340 $ 101,300 Current notes receivable (trade) 0 0 Long-term notes payable 86,800 103,000 Merchandise inventory 55,600 105,400 Common stock, $5 par value 190,000 226,000 Total assets 408,000 392,500 Retained earnings 96,400 126,000 Common stock, $5 par value 190,000 226,000 Total liabilities and equity $ 434,540 $ 556,300 Retained earnings 44,389 55,231 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 (f) days sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be better short-term credit risk.

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