Required information

Problem 17-5A 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 Company			Kyan Company					Barco Company			Kyan Company
Data from the current year-end balance sheets								Data from the current years income statement
Assets								Sales	$	760,000		$	897,200
Cash	$	19,000		$	34,000			Cost of goods sold		593,100			632,500
Accounts receivable, net		38,400			57,400			Interest expense		8,600			12,000
Merchandise inventory		84,940			138,500			Income tax expense		14,608			24,769
Prepaid expenses		5,700			7,200			Net income		143,692			227,931
Plant assets, net		350,000			305,400			Basic earnings per share		3.27			5.81
Total assets	$	498,040		$	542,500			Cash dividends per share		3.81			4.03
Liabilities and Equity								Beginning-of-year balance sheet data
Current liabilities	$	60,340		$	96,300			Accounts receivable, net	$	25,800		$	55,200
Long-term notes payable		81,800			107,000			Merchandise inventory		63,600			107,400
Common stock, $5 par value		220,000			196,000			Total assets		448,000			412,500
Retained earnings		135,900			143,200			Common stock, $5 par value		220,000			196,000
Total liabilities and equity	$	498,040		$	542,500			Retained earnings		159,848			73,245

Problem 17-5A Part 1

Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (d) inventory turnover, (e) days sales in inventory, and (f) days sales uncollected. (Do not round intermediate calculations.)

For both companies compute the profit margin ratio.

(a)	Profit Margin Ratio
Company	Choose Numerator:	/	Choose Denominator:	=	Profit margin ratio
		/		=	Profit margin ratio
Barco		/		=	0	%
Kyan		/		=	0	%

For both companies compute the total asset turnover

b)	Total Asset Turnover
Company	Choose Numerator:	/	Choose Denominator:	=	Total Asset Turnover
		/		=	Total asset turnover
Barco		/		=	0	times
Kyan		/		=	0	times

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	%

For both companies compute the return on common stockholders equity.

(d)	Return On Common Stockholders' Equity
Company	Choose Numerator:			/	Choose Denominator	=	Return On Common Stockholders' Equity
		-		/		=	Return On common stockholders' equity
Barco		-		/		=	0	%
Kyan		-		/		=	0	%

Assuming that share and each companys stock can be purchased at $80 per share, compute their price-earnings ratios.

(e)	Price-Earnings Ratio
Company	Choose Numerator:	/	Choose Denominator:	=	Price-Earnings Ratio
		/		=	Price-earnings ratio
Barco		/		=	0	times
Kyan		/		=	0	times

Assuming that each companys stock can be purchased at $80 per share, compute their dividend yields.

(f)	Dividend Yield
Company	Choose Numerator:	/	Choose Denominator:	=	Dividend Yield
		/		=	Dividend yield
Barco		/		=	0	%
Kyan		/		=	0	%