2 Required information [The following information applies to the questions displayed below.] Summary information from the financial statements of two companies competing in the same industry follows. Data from the current year-end balance sheets Assets Barco Company Kyan Company Data from the current year's income statement Cash Oped $ 20,000 $ 31,000 Accounts receivable, net 38,400 Book ferences Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity 84,640 6,000 300,000 56,400 130,500 7,750 313,400 $ 449,040 $ 539,050 $ 60,340 $ 101,300 79/800 190,000 107,000 236,000 118,900 94,750 $ 449,040 $ 539,050 Sales Cost of goods sold Interest expense Income tax expense Net income Basic earnings per share Cash dividends per share Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Barco Company Kyan Company $ 770,000 $882,200 591,100 652,500 8,000 16,000 14,800 24,355 156,100 189,345 4.11 F 4.01 3.73 3.95 $ 31,800 $ 55,200 57,600 115,400 388,000 422,500 Common stock, $5 par value Retained earnings 190,000 236,000 104,540 91,845 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 $75 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. 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total asset Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings 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. Numerator: 2A rof Mar 2A Tot Asset. 2A Ret on Tot 2A Ret On tatio Turn Assets Equity For both companies compute the profit margin ratio. (a) Company 2A Price Earn Ratio 2A Div Yield Req 2B Profit Margin Ratio Denominator: Net income /Net sales Barco Kyan > CUELLO Profit margin ratio === == Profit margin ratio 0% = 0% 2A Prof Mar Ratio 2A Tot Asset Turn > 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, an Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-eangs ratio 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 Ratio 2A Tot Asset. 2A Ret on Tot 2A Ret On 2A Price Earn Jurn Assets Equity For both companies compute the total asset turnover Ratio Total Asset Turnover Denominator: (b) Company Numerator: Net sales / Average total assets Barco 11 = || = Kyan || = 2A Div Yield Req 2B Total Asset Turnover Total asset turnover 0 times 0 times < 2A Prof Mar Ratio 2A Ret on Tot Assets > 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, an Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratio 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 total assets. Ratio 2A Div Yield Req 2B (c) Company Numerator: Return on Total Assets Denominator: Net income / Average total assets Barco Kyan 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 () ret Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratios and ( 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 I Return On Equity Denominator 2A Div Yield Req 2B Return On Equity = Return On equity = 0% = 0% < 2A Ret on Tot Assets 2A Price Earn Ratio > 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) re Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratios and 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 Petio 2A Div Yield Req 2B Assuming that share and each company's stock can be purchased at $75 per share, compute their price-earnings ratios. (e) Company Price-Earnings Ratio Numerator: Denominator: Market price per common share / Earnings per share Barco Kyan 1 Price-Earnings Ratio = Price-earnings ratio = 0 times = < 2A Ret On Equity 2A Div Yield > 0 times 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratios and 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 $75 per share, compute their dividend yields. (f) Company Dividend Yield Numerator: 1 Denominator: Dividend Yield Annual cash dividends per share /Market price per share = Dividend yield Barco Kyan = 0% = 0% < 2A Price Earn Ratio Req 2B > 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total sets, and (d Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratios an 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