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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

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 Company Kyan Company
Data from the current year-end balance sheets Data from the current years income statement
Assets Sales $ 790,000 $ 927,200
Cash $ 19,000 $ 35,000 Cost of goods sold 586,100 632,500
Accounts receivable, net 39,400 56,400 Interest expense 8,200 13,000
Merchandise inventory 84,540 134,500 Income tax expense 15,185 25,597
Prepaid expenses 5,600 7,000 Net income 180,515 256,103
Plant assets, net 310,000 304,400 Basic earnings per share 4.30 5.21
Total assets $ 458,540 $ 537,300 Cash dividends per share 3.78 4.03
Liabilities and Equity Beginning-of-year balance sheet data
Current liabilities $ 61,340 $ 104,300 Accounts receivable, net $ 29,800 $ 54,200
Long-term notes payable 84,800 105,000 Merchandise inventory 59,600 113,400
Common stock, $5 par value 210,000 246,000 Total assets 448,000 412,500
Retained earnings 102,400 82,000 Common stock, $5 par value 210,000 246,000
Total liabilities and equity $ 458,540 $ 537,300 Retained earnings 80,645 24,173

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.

  • 2A Prof Mar Ratio
  • 2A Tot Asset Turn
  • 2A Ret on Tot Assets
  • 2A Ret On Equity
  • 2A Price Earn Ratio
  • 2A Div Yield
  • Req 2B

For both companies compute the profit margin ratio.

(a) Profit Margin Ratio
Company Numerator: / Denominator: = Profit margin ratio
/ = Profit margin ratio
Barco / = 0 %
Kyan / = 0 %

For both companies compute the total asset turnover

(b) Total Asset Turnover
Company Numerator: / Denominator: = Total Asset Turnover
/ = Total asset turnover
Barco / = 0 times
Kyan / = 0 times

For both companies compute the return on total assets.

(c) Return on Total Assets
Company Numerator: / Denominator: = Return on Total Assets
/ = Return on total assets
Barco / = 0 %
Kyan / = 0 %

For both companies compute the return on equity.

(d) Return On Equity
Company Numerator: / Denominator = Return On Equity
/ = Return On equity
Barco / = 0 %
Kyan / = 0 %

Assuming that share and each companys stock can be purchased at $75 per share, compute their price-earnings ratios.

(e) Price-Earnings Ratio
Company Numerator: / Denominator: = Price-Earnings Ratio
/ = Price-earnings ratio
Barco / = 0 times
Kyan / = 0 times

Assuming that each companys stock can be purchased at $75 per share, compute their dividend yields.

(f) Dividend Yield
Company Numerator: / Denominator: = Dividend Yield
/ = Dividend yield
Barco / = 0 %
Kyan / = 0 %

Identify which companys stock you would recommend as the better investment.

The better investment

Please help with this problem and please show the work

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