Barco Company			Kyan Company					Barco Company			Kyan Company
Data from the current year-end balance sheets								Data from the current years income statement
Assets								Sales	$	780,000		$	900,200
Cash	$	19,500		$	37,000			Cost of goods sold		587,100			642,500
Accounts receivable, net		34,400			54,400			Interest expense		8,900			16,000
Merchandise inventory		84,740			130,500			Income tax expense		14,992			24,852
Prepaid expenses		6,000			7,000			Net income		169,008			216,848
Plant assets, net		310,000			313,400			Basic earnings per share		4.97			4.41
Total assets	$	454,640		$	542,300			Cash dividends per share		3.78			3.94
Liabilities and Equity								Beginning-of-year balance sheet data
Current liabilities	$	62,340		$	97,300			Accounts receivable, net	$	28,800		$	52,200
Long-term notes payable		79,800			101,000			Merchandise inventory		59,600			111,400
Common stock, $5 par value		170,000			246,000			Total assets		388,000			372,500
Retained earnings		142,500			98,000			Common stock, $5 par value		170,000			246,000
Total liabilities and equity	$	454,640		$	542,300			Retained earnings		102,012			75,000

rev: 11_27_2019_QC_CS-192168

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 companys stock can be purchased at $85 per share, compute their (e) price-earnings ratios and (f) dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 2b. Identify which companys stock you would recommend as the better investment.

For both companies compute the profit margin ratio.

(a)	Profit Margin Ratio
Company	Choose Numerator:	/	Choose Denominator:	=	Profit margin ratio
	Net income	/	Net sales	=	Profit margin ratio
Barco	160,808	/	780,000	=	20.6	%
Kyan	207,903	/	898,200	=	23.1	%

For both companies compute the total asset turnover

(b)	Total Asset Turnover
Company	Choose Numerator:	/	Choose Denominator:	=	Total Asset Turnover
		/		=	Total asset turnover
Barco	780,000	/		=	0	times
Kyan	900,200	/		=	0	times

For both companies compute the return on total assets.

(c)	Return on Total Assets
Company	Choose Numerator:	/	Choose Denominator:	=	Return on Total Assets
		/		=	Return on total assets
Barco		/		=	0	%
Kyan		/		=	0

For both companies compute the return on common stockholders equity.

(d)	Return On Common Stockholders' Equity
Company	Choose Numerator:			/	Choose Denominator	=	Return On Common Stockholders' Equity
		-		/		=	Return On common stockholders' equity
Barco		-		/		=	0	%
Kyan		-		/		=	0	%

Assuming that share and each companys stock can be purchased at $85 per share, compute their price-earnings ratios.

(e)	Price-Earnings Ratio
Company	Choose Numerator:	/	Choose Denominator:	=	Price-Earnings Ratio
		/		=	Price-earnings ratio
Barco		/		=	0	times
Kyan		/		=	0	times

Assuming that each companys stock can be purchased at $85 per share, compute their dividend yields.

(f)	Dividend Yield
Company	Choose Numerator:	/	Choose Denominator:	=	Dividend Yield
		/		=	Dividend yield
Barco		/		=	0	%
Kyan		/		=	0	%

Identify which companys stock you would recommend as the better investment.

	The better investment