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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. Barco Kyan Company Company Data from the current year-end balance sheets Assets Cash $ 21,500 $ 33,000 Accounts receivable, net 38,400 51,400 Merchandise inventory 84,640 132,500 Prepaid expenses 5,700 7,600 Plant assets, net 300,000 308,400 Total assets $450,240 $532,900 Barco Kyan Company Company Data from the current year's income statement Sales $810,000 $901,200 Cost of goods sold 588,100 630,500 Interest expense 8,300 14,000 Income tax expense 15,569 24,879 Net income 198,031 231,821 Basic earnings per share 6.19 5.63 Cash dividends per share 3.80 3.92 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 63, 340 $104,300 82,800 107,000 160,000 206,000 144,100 115,600 $450,240 $532,900 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 27,800 $ 53200 59,600 115,400 428,000 382,500 160,000 206,000 67,669 45,283 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, () return on total assets, and (d) return on common stockholders' equity. Assuming that each company's stock can be purchased at $100 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. 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (return on total assets, and (d) return on common stockholders' equity. Assuming that each company's stock can be purchased at $100 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. Complete this question by entering your answers in the tabs below. 2A Prof Mar Ratio 2A Tot Asset 2A Ret on Tot Turn Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Reg 2B For both companies compute the profit margin ratio. (a) Company Choose Numerator: Profit Margin Ratio 1 Choose Denominator: 1 Profit margin ratio Profit margin ratio 0 % 0 % Barco 1 Kyan 1 2A Prof Mar Ratio 2A Tot Asset 2A Ret on Tot Turn Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the total asset turnover (b) Company Choose Numerator: Total Asset Turnover I Choose Denominator: 1 1 1 = Total Asset Turnover = Total asset turnover 0 times 0 times Barco Kyan 2A Prof Mar Ratio 2A Tot Asset 12A Ret on Tot Turn Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Reg 2B For both companies compute the return on total assets. Return on Total Assets (c) Company Choose Numerator: 1 Choose Denominator: Return on Total Assets = Return on total assets Barco = 0 % Kyan 0 % 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 For both companies compute the return on common stockholders' equity. (d) Company Return On Common Stockholders' Equity Choose Denominator Choose Numerator: Return On Common Stockholders' Equity Return On common stockholders' equity Barco 1 1 / 0 % Kyan 0 %
