Barco Company Kyan Company Data from the current year-end balance sheets Assets
ID: 2468028 • Letter: B
Question
Barco
Company
Kyan
Company
Data from the current year-end balance sheets
Assets
Cash
$
21,500
$
33,000
Accounts receivable, net
36,400
50,400
Current notes receivable (trade)
9,100
8,800
Merchandise inventory
84,640
138,500
Prepaid expenses
5,700
7,150
Plant assets, net
350,000
307,400
Total assets
$
507,340
$
545,250
Liabilities and Equity
Current liabilities
$
67,340
$
94,300
Long-term notes payable
79,800
105,000
Common stock, $5 par value
220,000
216,000
Retained earnings
140,200
129,950
Total liabilities and equity
$
507,340
$
545,250
Barco
Company
Kyan
Company
Data from the current year’s income statement
Sales
$
780,000
$
889,200
Cost of goods sold
589,100
638,500
Interest expense
8,300
16,000
Income tax expense
14,992
24,548
Net income
167,608
210,152
Basic earnings per share
3.81
4.86
Cash dividends per share
3.74
4.02
Beginning-of-year balance sheet data
Accounts receivable, net
$
27,800
$
53,200
Current notes receivable (trade)
0
0
Merchandise inventory
65,600
113,400
Total assets
418,000
392,500
Common stock, $5 par value
220,000
216,000
Retained earnings
137,152
93,462
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.)
2.1
For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on common stockholders’ equity. Assuming that share and each company’s stock can be purchased at $85 per share, compute their (e) price-earnings ratios and (f) dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Barco
Company
Kyan
Company
Data from the current year-end balance sheets
Assets
Cash
$
21,500
$
33,000
Accounts receivable, net
36,400
50,400
Current notes receivable (trade)
9,100
8,800
Merchandise inventory
84,640
138,500
Prepaid expenses
5,700
7,150
Plant assets, net
350,000
307,400
Total assets
$
507,340
$
545,250
Liabilities and Equity
Current liabilities
$
67,340
$
94,300
Long-term notes payable
79,800
105,000
Common stock, $5 par value
220,000
216,000
Retained earnings
140,200
129,950
Total liabilities and equity
$
507,340
$
545,250
Explanation / Answer
Barco
Kyan
Current ratio
Current assets/current liabilities
2.34
2.52
Acid test ratio
Current assets- prepaid expense – inventory/ current liabilities
.99
.98
A/c receivable turnover
Net sales/average account receivable
24.30 times
17.17 times
Inventory turnover
COGS/ average inventory
7.84 times
5.07 times
Days in inventory
365/inventory turnover
46.56 days
71.99 days
Days in sales
365/account receivable turnover
15.02 days
21.26 days
Profit margin
Net income/ sales
21.49%
23.63%
Total asset turnover
Net sales/ average total assets
1.69
1.90
Return on total assets
Net income/ average total assets
36.23
44.82
Return on common stockholder’s equity
Net income/average stockholders’
76.19%
97.29%
P/E ratio
Market value/ earning per share
22.31
17.49
Dividend yield
Cash dividend/ market value
0.044
0.048
Barco
Kyan
Current ratio
Current assets/current liabilities
2.34
2.52
Acid test ratio
Current assets- prepaid expense – inventory/ current liabilities
.99
.98
A/c receivable turnover
Net sales/average account receivable
24.30 times
17.17 times
Inventory turnover
COGS/ average inventory
7.84 times
5.07 times
Days in inventory
365/inventory turnover
46.56 days
71.99 days
Days in sales
365/account receivable turnover
15.02 days
21.26 days
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