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. Data from the current year-end balance sheets Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net. Total assets Liabilities and Equity Current liabilities. Long-term notes payable Common stock, $5 par value. Retained earnings Total liabilities and equity Barco Company Kyan Company Barco Company Kyan Company Data from the current year's income statement Sales $ 19,000 $ 36,000 Cost of goods sold 38,400 59,400 Interest expense $810,000 591,100 8,900 $ 903,200 640,500 12,000 138,500 Income tax expense 15,569 24,935 7,350 310,400 Net income 194,431 225,765 Basic earnings per share 5.12 4.99 3.79 3.95 84,840 5,400 310,000 $ 457,640 $ 551,650 $ 60,340 $ 100,300 81,800 115,000 190,000 125,500 226,000 110,350 $ 457,640 $ 551,650 Cash dividends per share Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 27,800 $50,200 61,600 107,400 438,000 412,500 190,000 226,000 75,089 63,125 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 $75 per share, compute their (e) price-earnings ratios and (dividend yields. 2b. Identify which company's stock you would recommend as the better investment.