Problem 13-5A Comparative ratio analysis LO A1, P3 [The following information applies to the questions displayed below.) Summary information from the financial statements of two companies competing in the same industry follows. 4.51 Barco Kyan Barco Kyan Company Company Company Company Data from the current year-end balance sheets Data from the current year's 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 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) 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 Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the total asset turnover (b) Total Asset Turnover Company Choose Numerator: Net sales 770,000 Choose Denominator: Average total assets 421,720 462,475 Total Asset Turnover Total asset turnover 1.8 times times Barco Kyan 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 0 % 0 % Net income 162,200 210,400 Barco Kyan Assuming that share and each company's stock can be purchased at $75 per share, compute their price-earnings ratios. Price-Earnings Ratio Choose Denominator: Company Choose Numerator: Price-Earnings Ratio Price-Earnings Ratio 0 times 0 times Barco Kyan (1) Dividend Yield Choose Denominator: Company = Choose Numerator: Annual cash dividends per share Dividend Yield Dividend Yield ll Market price per share = Barco Kyan 75 75 3.931 5.2 %