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 $90 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. Summary information from the financial statements of two companies competing in the same industry follows. Barco Kyan Company Company Barco Company Data from the current year-end balance sheets Assets Cash Accounts receivable, net 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 $ 18,000 $ 30,000 34,400 84,848 5,800 300,000 $ 443,040 51,400 136,500 7,700 304,400 $ 530,000 $ 70,340 $ 96,300 84,800 190,000 97,908 $ 443,040 $ 530,000 105,000 286,000 122,700 Data from the current year's income statement 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 Common stock, $5 par value Retained earnings $ 800,000 $ 900, 200 587,100 7,780 15,377 189,823 5.00 3.72 Kyan Company $ 28,800 65,600 458,000 190,000 49,437 644,500 12,000 24,852 218,848 5.31 3.96 $ 52,200 113,400 422,500 206,000 67,804 Complete this question by entering your answers in the tabs below. 2A Prof Mar 2A Tot Asset 2A Ret on Tot Ratio Turn Assets 2A Ret On Equity For both companies compute the profit margin ratio. (a) Company Barco Kyan Numerator: 1 1 1 1 2A Price Earn Ratio Profit Margin Ratio Denominator: = = = 2A Div Vield Profit margin ratio Profit margin ratio 96 96 Req 28 Problem 17-5A (Algo) Part 2 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 $90 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 For both companies compute the total asset turnover (b) Company Barco Kyan Numerator: I 1 Total Asset Turnover Denominator: < 2A Prof Mar Ratio = = 2A Div Yield Reg 28 Total Asset Turnover Total asset turnover times times 2A Ret on Tot Assets > Problem 17-5A (Algo) Part 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover. (c) return on total assets, and (c) return on equity. Assuming that each company's stock can be purchased at $90 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 Ratio Turn Assets 2A Ret On Equity For both companies compute the return on total assets. (c) Company Barco Kyan Numerator: 1 1 1 1 2A Price Earn Ratio Return on Total Assets Denominator: < 2A Tot Asset Turn 2A Div Vield = = Req 28 Return on Total Assets Return on total assets 2A Ret On Equity > %6 % Problem 17-5A (Algo) Part 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (c) return on equity. Assuming that each company's stock can be purchased at $90 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 Ratio Turn Assets For both companies compute the return on equity. (d) Company Barco Kyan Numerator: 1 I 1 I 2A Ret On 2A Price Earn Equity Ratio Return On Equity. Denominator < 2A Ret on Tot Assets 2A Div Yield = Req 28 Return On Equity Return On equity 2A Price Earn Ratio > 96 96 Problem 17-5A (Algo) Part 2 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 $90 per share, compute their (e) price-earnings ratios and (5) 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 2A Div Yield Req 28 Ratio Turn Assets Equity Ratio Assuming that share and each company's stock can be purchased at $90 per share, compute their price-earnings ratios. Price-Earnings Ratio Denominator: (e) Company Barco Kyan Numerator: I 1 1 1 < 2A Ret On Equity = = Price-Earnings Ratio Price-earnings ratio 2A Div Yield > times times Problem 17-5A (Algo) Part 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (c) return on equity. Assuming that each company's stock can be purchased at $90 per share, compute their (e) price-earnings ratios and (5) 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 2A Div Yield Reg 2B Ratio Turn Assets Equity Ratio Assuming that each company's stock can be purchased at $90 per share, compute their dividend yields. Dividend Yield (f) Company Barco Kyan Numerator: < 2A Price Earn Ratio Denominator: = Dividend Yield Dividend yield = = = Req 2B > 96 96 Problem 17-5A (Algo) Part 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (c) return on equity. Assuming that each company's stock can be purchased at $90 per share, compute their (e) price-earnings ratios and (5) 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 Ratio Assets 2A Ret On 2A Price Earn 2A Div Vield Turn Equity Ratio Identify which company's stock you would recommend as the better investment. The better investment Reg 28