17-5A (Algo) 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 Data from the current year-end balance sheets Data from the current year's income statement Assets Sales $ 800,000 $ 888,200 Cash $ 22,000 $ 36,000 Cost of goods sold 595,100 640,500 Accounts receivable, net 35,400 54,400 Merchandise inventory 84,840 140,500 Prepaid expenses Plant assets, net 6,100 290,000 7,100 Net income 313,400 Total assets $ 438,340 $ 551,400 Current liabilities Liabilities and Equity Long-term notes payable Common stock, $5 par value Retained earnings $ 66,340 $ 102,300 78,800 200,000 93,200 109,000 206,000 134,100 Total liabilities and equity $ 438,340 $ 551,400 Interest expense Income tax expense Basic earnings per share Cash dividends per share Beginning-of-year balance sheet data. Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings 8,600 15,000 15,377 24,521 180,923 208,179 4.52 3.74 5.05 3.94 $ 28,800 $ 51,200 55,600 115,400 418,000 402,500 200,000 206,000 61,877 88,249 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $70 per share, compute their (e) price-earnings ratios and (1) dividend yields. 2b. Identify which company's stock you would recommend as the better investment. Complete this question by entering your answers in the tabs below. 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On Ratio Turn Assets Equity For both companies compute the profit margin ratio. (a) Company Barco Kyan 2A Price Earn Ratio 2A Div Yield Req 2B Profit Margin Ratio Numerator: 1 Denominator: = Profit margin ratio = Profit margin ratio 1 = 0% 0% 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $70 per share, compute their (e) price-earnings ratios and (f) dividend yields. 2b. Identify which company's stock you would recommend as the better investment. Complete this question by entering your answers in the tabs below. 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On 2A Price Earn Ratio Turn Assets Equity For both companies compute the total asset turnover Ratio (b) Company Numerator: Barco Kyan 2A Div Yield Req 2B Total Asset Turnover Denominator: = Total Asset Turnover = Total asset turnover = 0 times 0 times 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $70 per share, compute their (e) price-earnings ratios and (1) dividend yields. 2b. Identify which company's stock you would recommend as the better investment. Complete this question by entering your answers in the tabs below. Turn 2A Prof Mar 2A Tot Asset 2A Ret on Tot Ratio Assets 2A Ret On 2A Price Earn Equity Ratio 2A Div Yield Req 2B For both companies compute the return on total assets. (c) Company Barco Kyan Numerator: Return on Total Assets Denominator: = Return on Total Assets = Return on total assets = 0% = 0% 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $70 per share, compute their (e) price-earnings ratios and (f) dividend yields. 2b. Identify which company's stock you would recommend as the better investment. Complete this question by entering your answers in the tabs below. 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On 2A Price Earn Ratio Turn Assets Equity For both companies compute the return on equity. Ratio (d) Company Numerator: Barco Kyan 1 2A Div Yield Req 2B Return On Equity Denominator = Return On Equity = Return On equity = 0% = 0 % 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $70 per share, compute their (e) price-earnings ratios and (f) dividend yields. 2b. Identify which company's stock you would recommend as the better investment. Complete this question by entering your answers in the tabs below. 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On 2A Price Earn Ratio Turn Assets Equity Ratio 2A Div Yield Req 2B Assuming that share and each company's stock can be purchased at $70 per share, compute their price-earnings ratios. (e) Company Barco Kyan Numerator: 1 1 Price-Earnings Ratio Denominator: = = Price-Earnings Ratio Price-earnings ratio 0 times 0 times 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $70 per share, compute their (e) price-earnings ratios and (f) dividend yields. 2b. Identify which company's stock you would recommend as the better investment. Complete this question by entering your answers in the tabs below. Turn 2A Prof Mar 2A Tot Asset 2A Ret on Tot Ratio Assets 2A Ret On 2A Price Earn Equity Ratio 2A Div Yield Req 2B Assuming that each company's stock can be purchased at $70 per share, compute their dividend yields. (f) Company Barco Kyan Numerator: Dividend Yield Denominator: = Dividend Yield Dividend yield 0% 0% 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $70 per share, compute their (e) price-earnings ratios and (1) dividend yields. 2b. Identify which company's stock you would recommend as the better investment. Complete this question by entering your answers in the tabs below. Turn 2A Prof Mar 2A Tot Asset 2A Ret on Tot Ratio Assets 2A Ret On 2A Price Earn Equity Ratio 2A Div Yield Req 2B Identify which company's stock you would recommend as the better investment. The better investment < 2A Div Yield Req 2B >