Problem 13-5A Comparative ratio analysis LO 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. Barco Kyan Company Company Data from the current year-end balance sheets Assets Cash $ 21,000 $ 36,000 Accounts receivable, net 33,400 51,400 Merchandise inventory 84,340 132,500 Prepaid expenses 5,300 7,650 Plant assets, net 330,000 304,400 Total assets $474,040 $531,950 Barco Kyan Company Company Data from the current year's income statement Sales $800,000 $888,200 Cost of goods sold 588, 100 650,500 Interest expense 7,900 17,000 Income tax expense 15,377 24,521 Net income 188,623 196, 179 Basic earnings per share 4.72 4.34 Cash dividends per share 3.81 3.94 | Beginning-of-year balance sheet data Accounts receivable, net $ 27,800 $ 53,200 Merchandise inventory 55,600 109,400 Total assets 408,000 412,500 Common stock, $5 par value 200,000 226,000 Retained earnings 88,677 71,559 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 65,340 $103,300 83,800 113,000 200,000 226,000 124,900 89,650 $474,040 $531,950 Problem 13-5A Part 2 Problem 13-5A Part 2 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 each company's stock can be purchased at $105 per share, compute their (e) price-earnings ratios and (1) 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 Req 2B For both companies compute the profit margin ratio. (a) Company Choose Numerator: Profit Margin Ratio | Choose Denominator: 1 1 = Profit margin ratio = Profit margin ratio Barco % Kyan 1 % 2A Prof Mar Ratio 2A Tot Asset Turn Problem 13-5A Part 2 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 each company's stock can be purchased at $105 per share, compute their (e) price-earnings ratios and (1) 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 Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Turn Req 2B For both companies compute the total asset turnover (b) Company Choose Numerator: Total Asset Turnover 1 Choose Denominator: 1 = Total Asset Turnover Total asset turnover times Barco 1 = Kyan / times Problem 13-5A Part 2 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 each company's stock can be purchased at $105 per share, compute their (e) price-earnings ratios and (1) 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 Req 2B For both companies compute the return on total assets. (c) Company Choose Numerator: Return on Total Assets 1 Choose Denominator: Return on Total Assets Return on total assets Barco % Kyan 1 % Problem 13-5A Part 2 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 each company's stock can be purchased at $105 per share, compute their (e) price-earnings ratios and (1) 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 Assets 2A Ret On Com Stock 2A Price Earn Ratio Turn 2A Div Yield Req 2B Assuming that share and each company's stock can be purchased at $105 per share, compute their price-earnings ratios. Price-Earnings Ratio 1 Choose Denominator: Company Choose Numerator: / = Price-Earnings Ratio = Price-earnings ratio times Barco 1 Kyan / times Problem 13-5A Part 2 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 each company's stock can be purchased at $105 per share, compute their (e) price-earnings ratios and (1) 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 Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Reg 2B Identify which company's stock you would recommend as the better investment. The better investment 2A Div Yield Req 2B