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	$ 880,200
Cash	$ 18,500	$ 38,000	Cost of goods sold	590,100	650,500
Accounts receivable, net	40,400	53,400	Interest expense	9,200	17,000
Merchandise inventory	84,940	140,500	Income tax expense	15,377	24,300
Prepaid expenses	5,500	7,300	Net income	185,323	188,400
Plant assets, net	350,000	303,400	Basic earnings per share	4.41	4.36
Total assets	$ 499,340	$ 542,600	Cash dividends per share	3.79	3.95
Liabilities and Equity			Beginning-of-year balance sheet data
Current liabilities	$ 70,340	$ 97,300	Accounts receivable, net	$ 29,800	$ 56,200
Long-term notes payable	80,800	99,000	Merchandise inventory	55,600	107,400
Common stock, $5 par value	210,000	216,000	Total assets	438,000	372,500
Retained earnings	138,200	130,300	Common stock, $5 par value	210,000	216,000
Total liabilities and equity	$ 499,340	$ 542,600	Retained earnings	112,057	112,540

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 $85 per share, compute their (e) price-earnings ratios and (f) dividend yields. 2b. Identify which companys stock you would recommend as the better investment.