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 Cash $ 21,000 $ 38,000 Accounts receivable, net 35,400 Merchandise inventory 84,840 Prepaid expenses Plant assets, net 5,800 350,000 Total assets Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings $ 497,040 $ 548,000 $ 65,340 83,800 180,000 167,900 $ 102,300 111,000 196,000 Total assets 138,700 Total liabilities and equity $ 497,040 $ 548,000 54,400 142,500 7,700 305,400 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 Common stock, $5 par value Retained earnings $ 780,000 $ 882,200 593,100 8,300 638,500 19,000 14,992 163,608 24,35$ 200,345 4.54 3.82 5.11 3.99 $ 28,800 53,600 458,000 422,500 180,000 196,000 141,812 94,763 $ 56,200 115,400 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 $70 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.