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 year$$s income statement

Assets Sales $ $800,000$ $ $885,200$

Cash $ $19,500$ $ $32,000$ Cost of goods sold $584,100636,500$

Accounts receivable, net $37,40059,400$ Interest expense $9,10017,000$

Merchandise inventory $84,940138,500$ Income tax expense $15,37724,438$

Prepaid expenses $6,2007,300$ Net income $191,423207,262$

Plant assets, net $350,000309,400$ Basic earnings per share $5\mathrm{.}044\mathrm{.}21$

Total assets $ $498,040$ $ $546,600$ Cash dividends per share $3\mathrm{.}783\mathrm{.}95$

Liabilities and Equity Beginning$-$of$-$year balance sheet data

Current liabilities $ $63,340$ $ $91,300$ Accounts receivable, net $ $25,800$ $ $51,200$

Long$-$term notes payable $84,800107,000$ Merchandise inventory $57,600117,400$

Common stock, $$5$ par value $190,000246,000$ Total assets $428,000392,500$

Retained earnings $159,900102,300$ Common stock, $$5$ par value $190,000246,000$

Total liabilities and equity $ $498,040$ $ $546,600$ Retained earnings $112,11789,378$

$2$a$.$ 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$$s stock can be purchased at $$80$ per share, compute their $($e$)$ price$-$earnings ratios and $($f$)$ dividend yields.

$2$b$.$ Identify which company$$s stock you would recommend as the better investment.Required information

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Summary information from the financial statements of two companies competing in the same industry follows.

$2$a$.$ 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 $$80$ per share, compute their $($e$)$ price$-$earnings ratios and $(f)$ dividend

yields.

$2$b$.$ Identify which company's stock you would recommend as the better investment.

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