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 companys stock can be purchased at $100 per share, compute their (e) price-earnings ratios and (f) dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 2b. Identify which companys stock you would recommend as the better investment.

! Required information 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 $ 20,500 $ 31,000 Accounts receivable, net 38,400 53,400 Merchandise inventory 84,540 136,500 Prepaid expenses 5,900 7,650 Plant assets, net 280,000 308,400 Total assets $429,340 $536,950 Barco Kyan Company Company Data from the current year's income statement Sales $ 780,000 $896,200 Cost of goods sold 585, 100 638,500 Interest expense 8,400 11,000 Income tax expense 14,992 24,741 Net income 171,508 221,959 Basic earnings per share 4.51 5.39 Cash dividends per share 3.77 3.96 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 61,340 $ 97,300 84,800 99,000 190,000 206,000 93,200 134,650 $429,340 $536,950 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 32,800 55,600 408,000 190,000 64,952 $ 52,200 105,400 402,1500 206,000 75, 843 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 $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 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 profit margin ratio. (a) Company Choose Numerator: Profit Margin Ratio Choose Denominator: 1 1 Profit margin ratio Profit margin ratio 0 % 0 % Barco 1 Kyan 1 Assessment Tool iFrame anies 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 $100 per share, compute their (e) price-earnings ratios and (H) 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 Req 2B For both companies compute the total asset turnover (b) Total Asset Turnover Company Choose Numerator: 1 Choose Denominator: = Total Asset Turnover / = II Total asset turnover Barco 1 = 0 times Kyan = 0 times 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 $100 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 Req 2B For both companies compute the return on total assets. (c) Return on Total Assets Company Choose Numerator: | Choose Denominator: = Return on Total Assets / = Return on total assets Barco / = 0 % Kyan / = 0 % 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 $100 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 Req 2B For both companies compute the return on common stockholders' equity. Return On Common Stockholders' Equity (d) Company Choose Numerator: / Choose Denominator = Return On Common Stockholders' Equity Return On common stockholders' equity Barco 1 II = 0 % Kyan = 0 % 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 $100 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 Req 2B Assuming that each company's stock can be purchased at $100 per share, compute their dividend yields. Dividend Yield (f) Company Choose Numerator: | Choose Denominator: = = Dividend Yield / = Dividend yield Barco / = 0 % Kyan / = 0 % 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 $100 per share, compute their (e) price-earnings ratios and (A) 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 Req 2B Identify which company's stock you would recommend as the better investment. The better investment