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. Iroquois Company Data from the current year-end. balance sheets Assets Cash Accounts receivable, net 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 Ratio Analysis Problem 5 Percy (a) Company Iroquois Company Iroquois For both companies compute the profit margin ratio. Profit Margin Ratio Denominator: Percy Company $ 19,500 38,400 84,440 5,800 310,000 $ 458,140 $540,800 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On 2A Price Earn Ratio Turn Assets Equity Ratio: Numerator: 1 1 1 $ 34,000 58,400 134,500 7,500 306,400 105,000 246,000 86,500 $ 458,140 $ 540,800 $ 71,340 $ 103,300 83,800 210,000 93,000 Complete this question by entering your answers in the tabs below. 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 $100 per share, compute their (e) price-earnings ratios and (1) dividend yields. 2b. Identify which company's stock you would recommend as the better investment. D Data from the current year's income statement Sales Cost of goods sold m Interest expense Income tax expense Net income Basic earnings per share Cash dividends per share Beginning-of-year balance sheet 20 data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings 2A Div Yield Profit margin ratio Profit margin ratio 0% 0% $ 780,000 589,100 8,900 14,992 167,008 3.98 3.81 Req 2B $ 28,800 55,600 458,000 210,000 86,012 Percy Company $908,200 648,500 18,000 25,073 216,627 4.40 4.00 $ 51,200 113,400 362,500 246,000 66,673

Required information Ratio analysis [The following information applies to the questions displayed bolow] Summary information from the financlal statements of two companies competing in the same industry follows. 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 ) retum on equity. Assuming that each company's stock can be purchased at $100 per share, compute their (c) price-earnings ratios and (h) dividend yeids 2b. Identify which company's stock you would recommend as the better investment: Complete this question by entering your answers in the tabs below. For both companies compute the profit margin ratio. Complete this question by entering your answers in the tabs below. For both companies compute the total asset tumover Complete this question by entering your answers in the tabs below. For both companies compute the return on total assets. Complete this question by entering your answers in the tabs below. For both companies compute the return on equity. Assuming that share and each company's stock can be purchased at $100 per share, compute their price-earnings ratios. Assuming that each company's stock can be purchased at $100 per share, compute their dividend yields