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Summary information from the financial statements of two companies competing in the same industry follows. Barco Company Kyan Company Barco Company Company Kyan Data
Summary information from the financial statements of two companies competing in the same industry follows. Barco Company Kyan Company Barco Company Company Kyan Data from the current year-end balance sheets Data from the current year's income statement Assets Sales $770,000 $880,200 Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities Long-tern notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 61,340 $93,300 80,800 101,000 180,000 206,000 123,300 142,150 $445,440 $542,450 Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 19,500 $34,000 46,500 64,600 84,440 132,500 5,000 290,000 Cost of goods sold 585,100 632,500 Interest expense 7,900 13,000 Income tax expense 14,800 24,300 6,950 Net income 162,200 210,400 304,400 Basic earnings per share 4.51 5.11 $445,440 $542,450 Cash dividends per share 3.81 3.93 Beginning-of-year balance sheet data $ 29,800 $ 54,200 55,600 107,400 398,000 382,500 180,000 206,000 98,300 93,600 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 $75 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. Tum 2A Prof Mar 2A Tot Asset 2A Ret on Tot Ratio Assets 2A Ret On Com Stock 2A Price Earn 2A Div Yield Ratio Req 28
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