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 year's income statement Assets Prepaid expenses Liabilities and Equity Long-term notes payable Common stock, $5 par value Retained earnings Cash $ 22,000 $ 34,000 Accounts receivable, net 40,400 53,400 Merchandise inventory 84,640 138,500 Plant assets, net Total assets Current liabilities 305,400 $ 452,740 $ 539,100 $ 67,340 $ 101,300 101,000 226,000 110,800 Total liabilities and equity $ 452,740 $ 539,100 5,700 300,000 83,800 200,000 101,600 7,800 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 data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 800,000 $ 914,200 586,100 640,500 8,400 18,000 15,377 25,238 190,123 230,462 4.75 5.10 3.70 3.92 $ 30,800 $ 57,200 61,600 111,400 398,000 412,500 200,000 226,000 59,477 57,522 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 $105 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. 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 For both companies compute the profit margin ratio. Ratio (a) Company Barco Kyan 2A Div Yield Req 2B Profit Margin Ratio Numerator: I Denominator: = Profit margin ratio 1 = Profit margin ratio 1 = 0% 0%