[The following information applies to the questions displayed below.] Summary in

Question

[The following information applies to the questions displayed below.]

Summary information from the financial statements of two companies competing in the same industry follows.

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.

Complete this question by entering your answers in the tabs below.

For both companies compute the inventory turnover.

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 $ 925,200 Cash $ 19,500 $ 32,000 Cost of goods sold 590,100 640,500 Accounts receivable, net 34,400 56,400 Interest expense 8,200 15,000 Current notes receivable (trade) 10,000 8,600 Income tax expense 14,800 25,542 Merchandise inventory 84,440 138,500 Net income 156,900 244,158 Prepaid expenses 6,100 7,400 Basic earnings per share 3.92 5.93 Plant assets, net 370,000 313,400 Cash dividends per share 3.81 4.03 Total assets $ 524,440 $ 556,300 Beginning-of-year balance sheet data Liabilities and Equity Accounts receivable, net $ 30,800 $ 51,200 Current liabilities $ 62,340 $ 97,300 Current notes receivable (trade) 0 0 Long-term notes payable 86,800 105,000 Merchandise inventory 65,600 111,400 Common stock, $5 par value 200,000 206,000 Total assets 378,000 422,500 Retained earnings 175,300 148,000 Common stock, $5 par value 200,000 206,000 Total liabilities and equity $ 524,440 $ 556,300 Retained earnings 170,800 69,878

Explanation / Answer

For both companies compute the inventory turnover.

(d) Inventory Turnover Company Choose Numerator: / Choose Denominator: = Inventory Turnover Cost of goods sold / inventory = Inventory turnover Barco 590100 / 65600 = 9.00 times Kyan 640500 / 111400 = 5.75 times

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.