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 $ $770,000$ $ $910,200$

Cash $ $19,500$ $ $37,000$ Cost of goods sold $590,100632,500$

Accounts receivable, net $37,40056,400$ Interest expense $9,00018,000$

Merchandise inventory $84,640138,500$ Income tax expense $14,80025,128$

Prepaid expenses $5,1007,650$ Net income $156,100234,572$

Plant assets, net $350,000306,400$ Basic earnings per share $4\mathrm{.}345\mathrm{.}43$

Total assets $ $496,640$ $ $545,950$ Cash dividends per share $3\mathrm{.}803\mathrm{.}96$

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

Current liabilities $ $66,340$ $ $97,300$ Accounts receivable, net $ $26,800$ $ $55,200$

Long$-$term notes payable $83,800107,000$ Merchandise inventory $53,600105,400$

Common stock, $$5$ par value $180,000216,000$ Total assets $438,000382,500$

Retained earnings $166,500125,650$ Common stock, $$5$ par value $180,000216,000$

Total liabilities and equity $ $496,640$ $ $545,950$ Retained earnings $147,20062,150$

$2$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$$s stock can be purchased at $$85$ 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.