Ratio Assignment

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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

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

Ratio Assignment

Required:
Ratio Assignment1a. 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