B 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. 2 Barco Kyan Company Company Data from the current year-end balance sheets Assets Cash $ 18,500 $ 31,000 Accounts receivable, net 37,400 53,400 Merchandise inventory 84,440 142,500 Prepaid expenses 6,100 7,000 Plant assets, net 350,000 312,400 Total assets $496,440 $546,300 Barco Kyan Company Company Data from the current year's income statement Sales $790,000 $916,200 Cost of goods sold 590,100 642,$oo Interest expense 9,000 15,000 Income tax expense 15,185 25,94 Net income 175,715 233,406 Basic earnings per share 4.39 4195 Cash dividends per share 3.81 4.01 Liabilities and Equity Beginning-of-year balance sheet data Current liabilities $ 63, 340 $ 94,300 Accounts receivable, net $ 25,800 $ 52,100 Long-term notes payable 86,800 107,000 Merchandise inventory 59,600 111,400 Common stock, $5 par value 200,000 236,000 Total assets 438,990 362,00 Retained earnings 146,300 109,000 Common stock, $5 par value 200,000 236,000 Total liabilities and $496,440 $546,300 Retained earnings 122,985 64,866 equity 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on common stockholders' equity. Assuming that each company's stock can be purchased at $85 per share, compute their (e) price-earnings ratios and (65 dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 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 Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the profit margin ratio. (a) Company Choose Numerator: Profit Margin Ratio 1 Choose Denominator: 11 Profit margin ratio Profit margin ratio II 1 = % Barco / 11 II % Kyan 2A Prof Mar Ratio 2A Tot Asset Turn > 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the total asset turnover (b) Total Asset Turnover Company Choose Numerator: 1 Choose Denominator: Total Asset Turnover IL / Total asset turnover times = Barco 1 times Kyan Complete this question by entering your answers in the tabs below. 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the return o 2A Ret on Tot Assets Return on Total Assets (c) Company Choose Numerator: TE I Choose Denominator: Return on Total Assets 1 = Return on total assets Il % Barco % Kyan 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 Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the return on common stockholders' equity. (d) Company Return On Common Stockholders' Equity. T Choose Denominator Choose Numerator: = Return On Common Stockholders' Equity = Return On common stockholders' equity - 1 1 % Barco 1 % Kyan F Complete this question by entering your answers in the tabs below. 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B Assuming that share and each company's stock can be purchased at $85 per share, compute their price-earnings ratios. (e) Company Price-Earnings Ratio | Choose Denominator: Choose Numerator: = Price-Earnings Ratio Price-earnings ratio times 1 Barco 1111 times Kyan 2A Div Yield > Complete this question by entering your answers in the tabs below. 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Reg 2B Identify which company's stock you would recommend as the better investment. The better investment