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 Assets Cash $ 19,500 $ 34,000 Accounts receivable, net 46,500 64,600 Total assets Merchandise inventory Prepaid expenses Plant assets, net Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings 84,440 5,000 290,000 132,500 384,400 $ 445,440 $ 542,450 data $ 61,340 80,800 180,000 123,300 $ 93,300 101,000 206,000 Total assets 142,150 Total liabilities and equity $ 445,440 $ 542,450 Data from the current year's income statement 6,950 Sales Cost of goods sold Interest expense Income tax expense Net income Basic earnings per share Cash dividends per share Beginning-of-year balance sheet Accounts receivable, net Merchandise inventory Common stock, $5 par value Retained earnings $ 770,000 585,100 $ 880,200 632,500 7,900 13,000 14,800 24,300 162,200 210,400 4.51 5.11 3.81 3.93 $ 29,800 $ 54,200 55,600 107,400 398,000 382,500 180,000 206,000 98,300 93,600 20. 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 (f) dividend yields. 2b. Identify which company's stock you would recommend as the better investment. Answer is not complete. 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 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the return on equity. (d) Company Numerator: Net income Barco Kyan Return On Equity Denominator 1 Average total equity 162,200 210,400 = 171,100 x= 206,000 = 2A Ret on Tot Assets 2A Price Earn Ratio > Return On Equity Return on equity 94.8 % 102.1 %