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 years income statement
Assets			Sales	$ 800,000	$ 898,200
Cash	$ 20,500	$ 36,000	Cost of goods sold	591,100	652,500
Accounts receivable, net	39,400	55,400	Interest expense	8,400	16,000
Merchandise inventory	84,840	134,500	Income tax expense	15,377	24,797
Prepaid expenses	6,000	7,250	Net income	185,123	204,903
Plant assets, net	340,000	306,400	Basic earnings per share	5.44	4.74
Total assets	$ 490,740	$ 539,550	Cash dividends per share	3.81	3.92
Liabilities and Equity			Beginning-of-year balance sheet data
Current liabilities	$ 60,340	$ 100,300	Accounts receivable, net	$ 30,800	$ 56,200
Long-term notes payable	78,800	113,000	Merchandise inventory	61,600	107,400
Common stock, $5 par value	170,000	216,000	Total assets	428,000	412,500
Retained earnings	181,600	110,250	Common stock, $5 par value	170,000	216,000
Total liabilities and equity	$ 490,740	$ 539,550	Retained earnings	126,017	74,691

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 companys stock can be purchased at $75 per share, compute their (e) price-earnings ratios and (f) dividend yields. 2b. Identify which companys 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 Ratio Turn Assets Equity 2A Price Earn 2A Div Yield Ratio Req 2B For both companies compute the profit margin ratio. (a) Company Profit Margin Ratio Denominator: Numerator: = 1 1 II Profit margin ratio Profit margin ratio 0 % 0 % Barco I! Kyan !! 2A Prof Mar Ratio 2A Tot Asset 2A Ret on Tot Turn Assets 2A Ret On Equity 2A Price Earn Ratio 2A Div Yield Reg 2B For both companies compute the total asset turnover (b) Company Total Asset Turnover Denominator: Numerator: 1 = Total Asset Turnover Total asset turnover 0 times 0 times Barco Kyan I! 2A Prof Mar Ratio 2A Tot Asset 2A Ret on Tot Turn Assets 2A Ret On Equity 2A Price Earn Ratio 2A Div Yield Reg 2B For both companies compute the return on total assets. (c) Company Return on Total Assets Denominator: Numerator: = 1 Return on Total Assets Return on total assets 0 % 0 % Barco = = Kyan 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Equity 2A Price Earn Ratio 2A Div Yield Reg 2B For both companies compute the return on equity. (d) Company Return On Equity Denominator Numerator: = Return On Equity Return On equity 1 = II Barco Kyan = = 0 % 0 % 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Equity 2A Price Earn Ratio 2A Div Yield Reg 2B Assuming that share and each company's stock can be purchased at $75 per share, compute their price-earnings rat (e) Company Price-Earnings Ratio Denominator: Numerator: 1 1 1 I! Price-Earnings Ratio Price-earnings ratio 0 times 0 times Barco = Kyan 1 II 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Equity 2A Price Earn Ratio 2A Div Yield Reg 2B Assuming that each company's stock can be purchased at $75 per share, compute their dividend yields. (f) Company Dividend Yield Denominator: Numerator: I Dividend Yield Dividend yield 0 % 0 % / I! Barco Kyan = =