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 $ 21,500 $ 31,000 Accounts receivable, net 36,400 52,400 Merchandise inventory 84,440 140,500 Prepaid expenses 5,500 7,550 Plant assets, net 330,000 306,400 Total assets $ 477,840 $ 537,850 Barco Kyan Company Company Data from the current year's income statement Sales $ 770,000 $919,200 Cost of goods sold 584,100 $38,500 Interest expense 8,500 14,000 Income tax expense 14,800 | 25,376 Net income 162,600 241,324 Basic earnings per share 4.07 | 5.34 Cash dividends per share 3.72 3.93 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 63,340 $100,300 82,800 103,000 200,000 226,000 131,700 108,550 $ 477,840 $ 537,850 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 31,800 $ 52,200 59,600 115,400 428,000 102,500 200,000 226,000 117,900 44,862 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 $80 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 Tot Asset 2A Prof Mar Ratio 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) Profit Margin Ratio 1 Choose Denominator: Company Choose Numerator: / = = Profit margin ratio Profit margin ratio 0 % Barco 1 Kyan / 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 commo stockholders' equity. Assuming that each company's stock can be purchased at $80 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 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 total asset turnover (b) Company Choose Numerator: Total Asset Turnover 1 Choose Denominator: / = Total Asset Turnover = Total asset turnover o times O times Barco Kyan 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 $80 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 return on total assets. (c) Company Choose Numerator: Return on Total Assets 1 Choose Denominator: 1 1 = Return on Total Assets = Return on total assets 0 % 0 % Barco Kyan 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 $80 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 return on common stockholders' equity. (d) Return On Common Stockholders' Equity Choose Denominator Company Choose Numerator: Return On Common Stockholders' Equity Return On common stockholders' equity 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 $80 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 share and each company's stock can be purchased at $80 per share, compute their price-earnings ratios. (e) Company Choose Numerator: Price-Earnings Ratio I Choose Denominator: 1 / = Price-Earnings Ratio Price-earnings ratio 0 times 0 times Barco Kyan 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 $80 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 $80 per share, compute their dividend yields. (1) Company Choose Numerator: Dividend Yield I Choose Denominator: / Dividend Yield = Dividend yield 0 % 0 % 1 Barco Kyan 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 $80 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 Identify which company's stock you would recommend as the better investment. The better investment