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.

Ba rco Kyan Ba rco Kyan Company Company Company Company Data from the current year-end Data from the current year's balance sheets income statement Assets Sales $ 800,000 $ 885.200 Cash $ 21,500 $ 37.000 Cost of goods sold 591,100 638,500 Accounts receivable. net 35,400 51,400 Interest expense 8,900 16,000 Merchandise inventory 84,540 134,500 Income tax expense 15.377 24.438 Prepaid expenses 6,200 7,400 Net income 184,623 206,262 Plant assets, net 300,000 306,400 Basic earnings per share 4.86 4.37 Total assets $ 447,640 $ 535.700 Cash dividends per share 3.72 3.99 Liabilities and Equity gzggnning-of-year balance sheet Current liabilities $ 60,340 $ 94.300 Accounts receivable, net $ 31,800 $ 52.200 Longterm notes payable 78,800 101,000 Merchandise inventory 65,600 107,400 Common stock, $5 par value 190,000 236,000 Total assets 398,000 382,500 Retained earnings 118,500 105,400 Common stock, $5 par value 190,000 236,000 Total liabilities and equity $ 447.540 $ 535.700 Retained earnings 75,237 87,466 Problem 17-5A (Algo) Part 1 Requhed: 1a. 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 (11 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