Required information 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 Kyan Kyan Barco Company Company Barco Company Company Data from the current year's income statement Sales Data from the current year-end balance sheets Assets Cash Accounts receivable, net Current notes receivable (trade) Merchandise inventory Prepaid expenses Plant assets, net Total assets $760,000 $912,200 590,100 638,500 8,700 12,000 14,608 25,183 146,592 236,517 5.74 3.91 $ 19,000 $ 36,000 Cost of goods sold 34,400 57,400 Interest expense 9,900 7,400 Income tax expense 84,240 130,500 Net income 7,150 Basic earnings per share 4.31 3.80 5,800 310,000 304,400 Cash dividends per share $463,340 $542,850 Beginning-of-year balance sheet data Accounts receivable, net s 30,800 $ 52,200 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $65,340 $103,300 Current notes receivable (trade) 83,800 103,000 Merchandise inventory 170,000 206,000 Total assets 144, 200 130,550 Common stock, $5 par value 57,600 105,400 388,000 412,500 170,000 206,000 126,808 55,125 $463,340 $542,850 Retained earnings Problem 13-5 Part 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (a) return on common stockholders' equity. Assuming that share and each company's stock can be purchased at $75 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