Required information Skip to question [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 $ 800,000 $ 892,200 Cash $ 18,000 $ 32,000 Cost of goods sold 593,100 636,500 Accounts receivable, net 36,400 59,400 Interest expense 7,700 15,000 Merchandise inventory 84,440 136,500 Income tax expense 15,377 24,631 Prepaid expenses 5,600 7,050 Net income 183,823 216,069 Plant assets, net 350,000 310,400 Basic earnings per share 4.60 5.00 Total assets $ 494,440 $ 545,350 Cash dividends per share 3.70 3.97 Liabilities and Equity Beginning-of-year balance sheet data Current liabilities $ 68,340 $ 92,300 Accounts receivable, net $ 27,800 $ 51,200 Long-term notes payable 79,800 99,000 Merchandise inventory 55,600 111,400 Common stock, $5 par value 200,000 216,000 Total assets 448,000 402,500 Retained earnings 146,300 138,050 Common stock, $5 par value 200,000 216,000 Total liabilities and equity $ 494,440 $ 545,350 Retained earnings 110,477 93,485 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 companys stock can be purchased at $100 per share, compute their (e) price-earnings ratios and (f) dividend yields. 2b. Identify which companys stock you would recommend as the better investment.

complete this question by entering your answers in the tabs below.

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

For both companies compute the total asset turnover

(b)	Total Asset Turnover
Company	Numerator:	/	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	Numerator:	/	Denominator:	=	Return on Total Assets
		/		=	Return on total assets
Barco		/		=	0	%
Kyan		/		=	0	%

For both companies compute the return on equity.

(d)	Return On Equity
Company	Numerator:	/	Denominator	=	Return On Equity
		/		=	Return On equity
Barco		/		=	0	%
Kyan		/		=	0	%