Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need help please Summary information from the financial statements of two companies competing in the same industry follows Barco Company Company Kyan Barco Kyan Company

need help please

image text in transcribedimage text in transcribed

image text in transcribed

image text in transcribed

image text in transcribedimage text in transcribedimage text in transcribed

image text in transcribed

Summary information from the financial statements of two companies competing in the same industry follows Barco Company Company Kyan Barco Kyan Company Company Data from the current year-end balance sheets Assets Cash Accounts receivable, net Merchandise inventor Prepaid expenses Plant assets, net Total assets Data from the current year's income statement Sales $770,000 $880,200 585,100 632500 7,900 13,000 14,800 24 300 162,200 210,400 $ 19,500 34,000 Cost of goods sold 46,500 64,600 Interest expense 84,440 132,500 Income tax expense 5,000 6,950 Net income 299,000 304,400 Basic earnings per share $445,440 $542,450 Cash dividends per share 4.51 3.81 3.93 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity Beginning-of -year balance sheet data $61,340 $ 93,300 Accounts receivable, net 80,800 101,000 Merchandise inventory 180,000 206,000 Total assets 123,300142,150 Common stock, $5 par value $ 29,800 $ 54,200 55,600 107,400 398,000 382500 180,000 206,000 $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 company's stock can be purchased at $75 per share, compute their (e) price- earnings ratios and ( 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions