Question
I need help calculating return on common stock. Please show all calculations and titles of where the numbers came from so it is easy to
I need help calculating return on common stock. Please show all calculations and titles of where the numbers came from so it is easy to follow the work. Giving just the titles is not helpful so this is why it is essential to show your work as I am a visual/tactile learner. Thank you.
Summary information from the financial statements of two companies competing in the same industry follows.
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 $ 770,000 $ 880,200 Cash $ 19,500 $ 34,000 Cost of goods sold 585,100 632,500 Accounts receivable, net 37,400 57,400 Interest expense 7,900 13,000 Current notes receivable (trade) 9,100 7,200 Income tax expense 14,800 24,300 Merchandise inventory 84,440 132,500 Net income 162,200 210,400 Prepaid expenses 5,000 6,950 Basic earnings per share 4.51 5.11 Plant assets, net 290,000 304,400 Cash dividends per share 3.81 3.93 Total assets $ 445,440 $ 542,450 Beginning-of-year balance sheet data Liabilities and Equity Accounts receivable, net $ 29,800 $ 54,200 Current liabilities $ 61,340 $ 93,300 Current notes receivable (trade) 0 0 Long-term notes payable 80,800 101,000 Merchandise inventory 55,600 107,400 Common stock, $5 par value 180,000 206,000 Total assets 398,000 382,500 Retained earnings 123,300 142,150 Common stock, $5 par value 180,000 206,000 Total liabilities and equity $ 445,440 $ 542,450 Retained earnings 98,300 93,600 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 share and each companys stock can be purchased at $75 per share, compute their (e) price-earnings ratios and (f) dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Work already completed:
(d) | Choose Numerator | / | Choose Denominator = | Return on Common Stockholders' Equity | ||||
Company | Net Income | - | Preferred Dividend | / | Average Common Stockholders' Equity | = | Return on Common Stockholders' Equity | |
Barco | 162,200 | - | 0 | / | = | % | ||
Kyan | 210,400 | - | 0 | / | = | % |
Please help me fill in the blanks. Thank you.
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