Summary information from the financial statements of two companies competing in the same industry follows. Barco Company Kyan Company Barco Company Kyan Company Data from the current year-end balance
Summary information from the financial statements of two companies competing in the same industry follows. Barco Company Kyan Company Barco Company Kyan Company Data from the current year-end balance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Summary information from the financial statements of two companies competing in the same industry follows.
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 | $ | 800,000 | $ | 926,200 | |||||||||
Cash | $ | 18,500 | $ | 31,000 | Cost of goods sold | 595,100 | 638,500 | |||||||
37,400 | 55,400 | Interest expense | 9,200 | 10,000 | ||||||||||
Merchandise inventory | 84,740 | 136,500 | Income tax expense | 15,377 | 25,570 | |||||||||
Prepaid expenses | 6,000 | 7,700 | Net income | 180,323 | 252,130 | |||||||||
Plant assets, net | 350,000 | 307,400 | Basic earnings per share | 4.75 | 5.84 | |||||||||
Total assets | $ | 496,640 | $ | 538,000 | Cash dividends per share | 3.81 | 3.98 | |||||||
Liabilities and Equity | Beginning-of-year |
|||||||||||||
Current liabilities | $ | 62,340 | $ | 94,300 | Accounts receivable, net | $ | 31,800 | $ | 53,200 | |||||
Long-term notes payable | 84,800 | 109,000 | Merchandise inventory | 61,600 | 111,400 | |||||||||
Common stock, $5 par value | 190,000 | 216,000 | Total assets | 388,000 | 412,500 | |||||||||
159,500 | 118,700 | Common stock, $5 par value | 190,000 | 216,000 | ||||||||||
Total liabilities and equity | $ | 496,640 | $ | 538,000 | Retained earnings | 123,957 | 38,506 | |||||||
rev: 11_27_2019_QC_CS-192168
Required:
1a. For both companies compute the (a)
1b. Identify the company you consider to be the better short-term credit risk.
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