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 Kyan Company Company Data from the current year-end balance sheets Assets Cash $ 18,500 $ 34,000 Accounts receivable, net 38,400 55,400 Merchandise inventory 84,640 136,500 Prepaid expenses 5,800 7,250 Plant assets, net 290,000 305, 400 Total assets $437, 340 $538,550 Barco Kyan Company Company Data from the current year's income statement Sales $770,000 $887,200 Cost of goods sold 584,100 632,500 Interest expense 7,700 11,000 Income tax expense 14,800 24, 493 Net income 163,400 219,207 Basic earnings per share 5.07 Cash dividends per share 3.74 3.97 5.11 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 67,340 $101,300 85,800 103,000 160,000 216,000 124, 200 118,250 $437, 340 $538,550 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 26,800 $ 55,200 59,600 113,400 458,000 392,500 160,000 216,000 80,480 70,547 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 each company's stock can be purchased at $80 per share, compute their (e) price-earnings ratios and dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 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 Ratio 2A Tot Asset 2A Ret on Tot Turn Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the profit margin ratio. (a) Company Choose Numerator: Net income Profit Margin Ratio I Choose Denominator: 1 Net sales = Profit margin ratio = Profit margin ratio Barco 0 % Kyan 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the total asset turnover (b) Company Choose Numerator: Net sales Total Asset Turnover I Choose Denominator: 1 Average total assets tal Asset Turnover Total asset turnover Barco 0 times 0 times Kyan 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the return on total assets. Return on Total Assets (c) Company Choose Numerator: I Choose Denominator: Return on Total Assets Net income erage total assets = Return on total assets Barco Kyan 0 % 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio A Div Yield Req 2B For both companies compute the return on common stockholders' equity. Choose Numerator: (d) Company Net income Barco Kyan Return On Common Stockholders' Equity Choose Denominator Average common stockholders' equity = Return On Common Stockholders' Equity = Return On common stockholders' equity - Preferred dividends - - I II 0 % 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B Assuming that share and each company's stock can be purchased at $80 per share, compute their price-earnings ratios. (e) Company Choose Numerator: Market price per common share Price-Earnings Ratio I Choose Denominator: 11 Earnings per share = Price-Earnings Ratio | = Price-earnings ratio 0 times 0 times Barco Kyan 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B Assets Assuming that each company's stock can be purchased at $80 per share, compute their dividend yields. (f) Company Choose Numerator: Annual cash dividends per share Dividend Yield | Choose Denominator: / Market price per share Dividend Yield = Dividend yield Barco 0 % 0 % Kyan 2A Prof Mar Ratio || 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B Identify which company's stock you would recommend as the better investment. The better investment Kyan company