In: Accounting
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Problem 13-5A Comparative ratio analysis LO P3
[The following information applies to the questions
displayed below.]
Summary information from the financial statements of two companies
competing in the same industry follows.
Barco Company |
Kyan Company |
Barco Company |
Kyan Company |
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Data from the current year-end balance sheets | Data from the current year’s income statement | |||||||||||||
Assets | Sales | $ | 770,000 | $ | 880,200 | |||||||||
Cash | $ | 19,500 | $ | 34,000 | Cost of goods sold | 585,100 | 632,500 | |||||||
Accounts receivable, net | 46,500 | 64,600 | Interest expense | 7,900 | 13,000 | |||||||||
Merchandise inventory | 84,440 | 132,500 | Income tax expense | 14,800 | 24,300 | |||||||||
Prepaid expenses | 5,000 | 6,950 | Net income | 162,200 | 210,400 | |||||||||
Plant assets, net | 290,000 | 304,400 | Basic earnings per share | 4.51 | 5.11 | |||||||||
Total assets | $ | 445,440 | $ | 542,450 | Cash dividends per share | 3.81 | 3.93 | |||||||
Liabilities and Equity | Beginning-of-year balance sheet data | |||||||||||||
Current liabilities | $ | 61,340 | $ | 93,300 | Accounts receivable, net | $ | 29,800 | $ | 54,200 | |||||
Long-term notes payable | 80,800 | 101,000 | Merchandise inventory | 55,600 | 107,400 | |||||||||
Common stock, $5 par value | 180,000 | 206,000 | Total assets | 398,000 | 382,500 | |||||||||
Retained earnings | 123,300 | 142,150 | Common stock, $5 par value | 180,000 | 206,000 | |||||||||
Total liabilities and equity | $ | 445,440 | $ | 542,450 | Retained earnings | 98,300 | 93,600 | |||||||
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For both companies compute the inventory turnover.