[The following information applies to the questions displayed below] Summary information from the financial statements of two companies competing in the same industry follows. Barco Company Kyan Company Barco Kyan Company Company Data from the current year-end Data from the current year's balance sheets Assots Cash $ 19,000 $ 36,000 Accounts receivable, net 34,400 55,400 Merchandise inventory 84,740 138,500 Prepaid expenses 6,100 7,800 income statement Sales Cost of goods sold Interest expense Income tax expense Net income $ 800,000 $ 909,200 593,100 650,500 8,800 13,000 15,377 25,100 182,723 220,600 Plant assets, net 320,000 303,400 Basic earnings per share 4.57 5.35 Total assets $ 464,240 $ 541,100 Current liabilities Liabilities and Equity Long-term notes payable Common stock, $5 par value Retained earnings data $ 69,340 82,800 200,000 206,000 112,100 141,800 Total liabilities and equity $464,240 541,100 $ 94,300 99,000 Cash dividends per share Beginning-of-year balance sheet Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings 3.72 3.93 $ 29,800 $ 50,200 63,600 107,400 458,000 392,500 200,000 206,000 78,177 83,116 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 company's stock can be purchased at $70 per share, compute their (e) price-earnings ratios and (dividend yields. 2b. Identify which company's stock you would recommend as the better investment For both companies compute the profit margin ratio. (a) Company Numerator: Profit Margin Ratio Denominator: Barco Kyan <2a prof mar ratio = = > For both companies compute the total asset turnover (b) Company Numerator: Barco Kyan Total Asset Turnover Denominator: Total Asset Turnover Total asset turnover O times O times < 2A Prof Mar Ratio 2A Ret on Tot Assets For both companies compute the return on total assets. (c) Company Numerator: Return on Total Assets: Barco Kyan Denominator: Return on Total Assets = Return on total assets 0% 0% <2a tot asset turn 2a ret on equity> For both companies compute the return on equity. (d) Company Numerator: Return On Equity Denominator Barco Kyan = Return On Equity Return On equity < 2A Ret on Tot Assets 2A Price Earn Ratio > 0 0 Assuming that share and each company's stock can be purchased at $70 per share, compute their price-earnings ratio (e) Company Numerator: Price-Earnings Ratio Denominator: Price-Earnings Ratio Barco Kyan Price-earnings ratio 0 times 0 times < 2A Ret On Equity 2A Div Yield > Assuming that each company's stock can be purchased at $70 per share, compute their yields. (f) Company Barco Kyan Numerator: Dividend Yield Denominator: Dividend Yield 22 Dividend yield = 0% 0% <2a price earn ratio req 2b>