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 $ 21,500 $ 33,000 Accounts receivable, net 34,400 54,400 Merchandise inventory 84,640 136,500 Prepaid expenses 5,900 6,950 Plant assets, net 290,000 308,400 Total assets $436,440 $539,250 Barco Kyan Company Company Data from the current year's income statement Sales $770,000 $917,200 Cost of goods sold 596,100 642,500 Interest expense 8,800 12,000 Income tax expense 14,800 25 321 Net income 150,300 237,379 Basic earnings per share 4.42 5.25 Cash dividends per share 3.72 3.96 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 61,340 $ 92,300 84,800 107,000 170,000 226,000 120,300 113,950 $436,440 $539,250 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 27,800 $ 55,200 53,600 109,400 398,000 362,500 170,000 226,000 96,480 55,563 Problem 13-5A Part 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (Creturn on total assets, and (d) return on common stockholders' equity. Assuming that each company's stock can be purchased at $75 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 For both companies compute the profit margin ratio. (a) Profit Margin Ratio