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 $ 19,500 $ 33,000 Accounts receivable, net 36,400 55,400 Merchandise Inventory 85,040 134,500 Prepaid expenses 5,100 7,100 Plant assets, net 360,000 310,400 Total assets $506,040 $540,400 Barco Kyan Company Company Data from the current year's income statement Sales $780,000 $909,200 Cost of goods sold 591,100 650,500 Interest expense 8,700 18,000 Income tax expense 14,992 25, 100 Net income 165,208 215,600 Basic earnings per share 4.13 4.77 Cash dividende per share 3.70 4.00 Liabilities and Equity Current liabilities Long-term notes payable Common stock, 55 par value Retained earnings Total liabilities and equity $ 66,340 $ 96,300 85,800 103,000 200,000 226,000 153.900 115,100 $506,040 $540,400 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 26,800 $ 54,200 59,600 117,400 388,000 422,500 200,000 226,000 136,692 80,300 Problem 17-5A Part 2 2a. For both companies compute the (a) profit margin ratio. (b) total asset turnover (return on total assets, and (c) 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 (4 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 Price Earn Ratio 2A Div Yield Reg 2B 2A Prof Mar 2A Tot Asset 2A Reton Tot 2A Ret On Ratio Turn Assets Com Stock For both companies compute the profit margin ratio. (a) Prolit Margin Ratie Company Choose Numerator: Choose Denominator Net Income Net sales Barco 1 - Profit margin ratio #Profit margin ratio Kyan 0 % ZA POMORO 2A Tot Asset Turn > 2A Prof Mar 2ATTot Asset 2A Ret on Tot 2A Ret On Ratio Turn Assets Com Stock For both companies compute the total asset turnover 2A Price Earn Ratio 2A Div Yield Req 2B (b) Company Choose Numerator: Total Asset Turnover 1 Choose Denominator: = Total Asset Turnover = Total asset tumover Barco 1 Kyan O times O times 2A Prof Mar 2A Tot Asset 12A Ret on Tot 2A Ret On Ratio Turn Assets Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the return on total assets. (c) Company Choose Numerator: Return on Total Assets 1 Choose Denominator: = Return on Total Assets = Return on total assets 11 Barco Kyan 0 % 0 % 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (a return on total assets, and (c) return on common stockholders' equity. Assuming that each company's stock can be purchased at $80 per share, compute their (el price-earnings ratios and (1 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 2A Tot Asset 2A Ret on Tot 2A Ret On 2A Price Earn Ratio Turn Assets Com Stock ZA Div Yield Ratio Reg 28 For both companies compute the return on common stockholders' equity (d) Return On Common Stockholders' Equity Company Choose Numerator Choose Denominator - Return On Common Stockholder Return On common stockholders Barco Kyan 1 per Share, compute their (el price-earnin 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. + nces 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On 2A Price Earn Ratio Turn Assets Com Stock 2A Div Yield Ratto Reg 28 Assuming that share and each company's stock can be purchased at $80 per share, compute their price-earnings ratios. Price-Earnings Ratio Company Choose Numerator: Choose Denominator: Price-Earnings Ratio 1 Price-earnings ratio Barco 0 times Kyan 4 Otimes Complete this question by entering your answers in the tabs below. ZA Prof Mar 2A Tot Asset 2A Reton Tot 2A Ret On Ratio Turn Assets Com Stock 2A Price Earn Ratio 2A Di Yield Reg 28 Assuming that each company's stock can be purchased at $80 per share, compute their dividend yields. Company Choose Numerator: Dividend Yield Choose Denominator: Barco E Dividend Yield Dividend yield 0% 0 % Kyan
