Required information Ratio analysis [The following information applies to the questions displayed below.] Summary information from the financial statements of two companies competing in the same industry follows. Cost of goods sold Iroquois Percy Company Company Iroquois Company Percy Company Data from the current year-end balance sheets Data from the current year's income statement Assets Cash Sales $770,000 $ 19,000 $ 34,000 Accounts receivable, net 59,400 591,100 8,300 $ 922,200 638,500 12,000 14,800 25,459 155,800 246,241 Basic earnings per share. 4.10 5.22 3.73 3.98 Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity 35,400 84,840 5,100 140,500 7,650 330,000 307,400 $474,340 $ 548,950 $ 64,340 $ 104,300 84,900 190,000 Interest expense Income tax expense Net income Cash dividends per share, Beginning-of-year balance sheet data Accounts receivable, not $31,800 $55,200 117,000 236,000 Merchandise inventory" 57,600 113,400 Total assets 438,000 392,500 135,200 91,650 Common stock, $5 par value 190,000 236,000 $474,340 548,950 Retained earnings 121,140 33,265 Ratio Analysis Problem 5 Ratio Analysis Problem 5 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratios and ( dividend yields. 2b. Identify which company's stock you would recommend as the better investment. Complete this question by entering your answers in the tabs below. Turn 2A Prof Mar 2A Tot Asset 2A Ret on Tot Ratio Assets 2A Ret On Equity 2A Price Ear Ratio 2A Div Yield Req 28 For both companies compute the profit margin ratio. (a) Company Iroquois Percy Numerator: 1 Profit Margin Ratio Denominator: Profit margin ratio Profit margin ratio 2A Tot Asset Tum 0% 0% Ratio Analysis Problem 5 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratios and (5) dividend yields. 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 2A Tot Asset 2A Ret on Tot 2A Ret On Ratio Turn Assets Equity For both companies compute the total asset turnover (b) Company Numerator: Iroquois Percy 2A Price Earn Ratio 2A Div Yield Req 28. Total Asset Turnover. Denominator: Total Asset Turnover. Total asset turnover O times. O times Ratio Analysis Problem 5 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratios and (dividend yields. 2b. Identify which company's stock you would recommend as the better investment. Complete this question by entering your answers in the tabs below. Turn 2A Prof Mar 2A Tot Asset 2A Ret on Tot Ratio Assets 2A Ret On 2A Price Earn Equity Ratio 2A Div Yield Req 28 For both companies compute the return on total assets. (c) Company Iroquois Percy Numerator: Return on Total Assets Denominator: Return on Total Assets Return on total assets 0% 0% Ratio Analysis Problem 5 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratios and (dividend yields. 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 Mari Ratio 2A Tot Asset 2A Ret on Tot 2A Ret On Turn Assets Equity Ratio 2A Price Earn 2A Div Yield Req 28 For both companies compute the return on equity. (d) Company Numerator: Iroquois Percy Return On Equity Denominator Return On Equity Return On equity 0% 0% < 2A Ret on Tot Assets 2A Price Earn Ratio > Ratio Analysis Problem 5 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratios and (dividend yields. 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 2A Ret On Turn Assets Equity 2A Price Earn Ratio 2A Div Yield Req 28 Assuming that share and each company's stock can be purchased at $75 per share, compute their price-earnings ratios. Company Iroquois Percy Numerator: Price-Earnings Ratio Denominator: Price-Earnings Ratio Price-earnings ratio 0 times S 0 times Ratio Analysis Problem 5 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratios and () dividend yields. 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 2A Tot Asset 2A Ret on Tot 2A Ret On 2A Price Earn Ratio Turn Assets Equity Ratio 2A Div Yield Req 28 Assuming that each company's stock can be purchased at $75 per share, compute their dividend yields. (0) Company Iroquois Percy Numerator: Dividend Yield Denominator: Dividend Yield Dividend yield 0% 70% < 2A Price Eam Ratio Req 28 > Ratio Analysis Problem 5 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratios and (dividend yields. 2b. Identify which company's stock you would recommend as the better investment. Complete this question by entering your answers in the tabs below. Turn 2A Prof Mar 2A Tot Asset 2A Ret on Tot Ratio Assets 2A Ret On 2A Price Earn Equity Ratio 2A Div Yield Req 28 Identify which company's stock you would recommend as the better investment. The better investment < 2A Div Yield