Required information

[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	$	810,000		$	912,200
Cash	$	18,000		$	37,000			Cost of goods sold		592,100			638,500
Accounts receivable, net		37,400			58,400			Interest expense		8,500			10,000
Current notes receivable (trade)		9,900			7,400			Income tax expense		15,569			25,183
Merchandise inventory		84,340			142,500			Net income		193,831			238,517
Prepaid expenses		5,700			7,500			Basic earnings per share		5.10			5.52
Plant assets, net		310,000			303,400			Cash dividends per share		3.75			3.91
Total assets	$	465,340		$	556,200
								Beginning-of-year balance sheet data
Liabilities and Equity								Accounts receivable, net	$	31,800		$	54,200
Current liabilities	$	68,340		$	95,300			Current notes receivable (trade)		0			0
Long-term notes payable		82,800			113,000			Merchandise inventory		57,600			105,400
Common stock, $5 par value		190,000			216,000			Total assets		418,000			402,500
Retained earnings		124,200			131,900			Common stock, $5 par value		190,000			216,000
Total liabilities and equity	$	465,340		$	556,200			Retained earnings		72,869			62,295

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 share and each companys stock can be purchased at $80 per share, compute their (e) price-earnings ratios and (f) dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 2b. Identify which companys stock you would recommend as the better investment.

rev: 11_20_2017_QC_CS-109866, 12_15_2017_QC_CS-112355