Ratio Assignment
| Data from the current year-end balance sheets | Data from the current year’s income statement | |||||||||||||
| Assets | Sales | $ | 780,000 | $ | 885,200 | |||||||||
| Cash | $ | 21,500 | $ | 31,000 | Cost of goods sold | 587,100 | 646,500 | |||||||
| Accounts receivable, net | 39,400 | 50,400 | Interest expense | 7,600 | 19,000 | |||||||||
| Merchandise inventory | 84,740 | 140,500 | Income tax expense | 14,992 | 24,438 | |||||||||
| Prepaid expenses | 5,100 | 7,250 | Net income | 170,308 | 195,262 | |||||||||
| Plant assets, net | 340,000 | 313,400 | Basic earnings per share | 4.05 | 3.97 | |||||||||
| Total assets | $ | 490,740 | $ | 542,550 | Cash dividends per share | 3.80 | 3.99 | |||||||
| Liabilities and Equity | Beginning-of-year balance sheet data | |||||||||||||
| Current liabilities | $ | 68,340 | $ | 104,300 | Accounts receivable, net | $ | 32,800 | $ | 51,200 | |||||
| Long-term notes payable | 85,800 | 105,000 | Merchandise inventory | 59,600 | 107,400 | |||||||||
| Common stock, $5 par value | 210,000 | 246,000 | Total assets | 438,000 | 392,500 | |||||||||
| Retained earnings | 126,600 | 87,250 | Common stock, $5 par value | 210,000 | 246,000 | |||||||||
| Total liabilities and equity | $ | 490,740 | $ | 542,550 | Retained earnings | 115,892 | 88,296 | |||||||
Required:
1a. 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 Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol 1B short term For both companies compute the current ratio. (a) Company Choose Numerator: Current assets Barco Kyan Current Ratio Choose Denominator: 1 Current liabilities = Current Ratio Current ratio 0 to 1 0 to 1 < 1A Current Ratio 1A Acid Test Ratio >Get Accounting homework help today
