M14 Homework i 8 Required information Saved Help Save & Exit Submit Part 2 of 2 [The following information applies to the questions displayed below.] Summary information from the financial statements of two companies competing in the same industry follows. Barco Company Kyan Company 10 points Data from the current year-end balance sheets Data from the current year's income statement Assets eBook Print References Cash $ 21,500 $ 37,000 Accounts receivable, net 35,400 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 84,740 5,600 360,000 57,400 134,500 7,600 305,400 $ 507,240 $ 541,900 $ 63,340 $ 98,300 85,800 200,000 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 111,000 216,000 Total assets 158,100 116,600 $ 507,240 $ 541,900 Common stock, $5 par value Retained earnings Check my work Barco Company Kyan Company $ 770,000 $ 916,200 590,100 7,800 644,500 10,000 14,800 25,294 157,300 236,406 3.93 5.47 3.77 3.97 $ 31,800 $ 50,200 61,600 117,400 428,000 382,500 200,000 216,000 151,600 51,698 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 $80 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 Ratio Turn Assets Equity For both companies compute the profit margin ratio. (a) Company Barco Kyan Numerator: 2A Price Earn Ratio 2A Div Yield Req 2B Profit Margin Ratio Denominator: = Profit margin ratio = Profit margin ratio = % = % 2A Prof Mar Ratio 2A Tot Asset Turn Complete this question by entering your answers in the tabs below. Turn 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On Ratio Equity Assets 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the total asset turnover (b) Company Numerator: Barco Kyan Total Asset Turnover Denominator: = Total Asset Turnover = Total asset turnover || = = < 2A Prof Mar Ratio 2A Ret on Tot Assets > times times Complete this question by entering your answers in the tabs below. Turn 2A Prof Mar 2A Tot Asset 2A Ret on Tot Ratio Assets 2A Ret On Equity 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the return on total assets. (c) Company Barco Kyan Return on Total Assets Numerator: I Denominator: = Return on Total Assets 1 = Return on total assets = % = % < 2A Tot Asset Turn 2A Ret On Equity > Complete this question by entering your answers in the tabs below. 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On Ratio Turn Assets Equity For both companies compute the return on equity. (d) Company Numerator: Barco Kyan 2A Price Earn Ratio 2A Div Yield Req 2B Return On Equity Denominator = Return On Equity = Return On equity = % % < 2A Ret on Tot Assets 2A Price Earn Ratio > 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 2A Div Yield Req 2B Assuming that share and each company's stock can be purchased at $80 per share, compute their price-earnings ratios. (e) Company Barco Kyan Numerator: Price-Earnings Ratio Denominator: = Price-Earnings Ratio = Price-earnings ratio = II times = times < 2A Ret On Equity 2A Div Yield > 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 2A Div Yield Req 2B Assuming that each company's stock can be purchased at $80 per share, compute their dividend yields. (f) Company Barco Kyan Numerator: Dividend Yield Denominator: Dividend Yield = Dividend yield = % = II % < 2A Price Earn Ratio Req 2B > Complete this question by entering your answers in the tabs below. Turn 2A Prof Mar 2A Tot Asset 2A Ret on Tot Ratio Assets 2A Ret On 2A Price Earn Equity Ratio 2A Div Yield Req 2B Identify which company's stock you would recommend as the better investment. The better investment < 2A Div Yield Req 2B >