Transcribed image text: ! 11 Required information (The following information applies to the questions displayed below. Part 2 of 2 Summary information from the financial statements of two companies competing in the same industry follows. 12 points Barco Kyan Company Company Data from the current year-end balance sheets Assets Cash $ 21,000 $ 34,000 Accounts receivable, net 39,400 54,400 Current notes receivable (trade) 9,900 7,000 Merchandise inventory 84,840 138,500 Prepaid expenses 6,000 7,250 Plant assets, net 310,000 305,400 Total assets $471,140 $546,550 Barco Kyan Company Company Data from the current year's income statement Sales $760,000 $886,200 Cost of goods sold 587,100 638,500 Interest expense 7,500 11,000 Income tax expense 14,608 24,465 Net income 150,792 212, 235 Basic earnings per share 3.97 4.31 Cash dividends per share 3.71 4.03 Skipped Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 61,340 $101,300 83,800 101,000 190,000 246,000 136,000 98,250 $471,140 $546,550 Beginning-of-year balance sheet data Accounts receivable, net Current notes receivable (trade) Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 26,800 $ 54,200 0 63,600 107, 400 398,000 412,500 190,000 246,000 126,188 84,291 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (C) return on total assets, and (d) return on common stockholders' equity. Assuming that share and each company's stock can be purchased at $80 per share, compute their (e) price- earnings ratios and (1) dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 2b. Identify which company's stock you would recommend as the better investment. Common stock, $5 par value Retained earnings Total liabilities and equity 190,000 246,000 136,000 98, 250 $471, 140 $546,550 Total assets Common stock, $5 par value Retained earnings 398,000 190,000 126,188 412,500 246,000 84,291 11 Part 2 of 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (C) return on total assets, and (d) return on common stockholders' equity. Assuming that share and each company's stock can be purchased at $80 per share, compute their (e) price- earnings ratios and (1) dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 2b. Identify which company's stock you would recommend as the better investment. 12 points Complete this question by entering your answers in the tabs below. Skipped 2A Pro Marg Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock Equity 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the profit margin ratio. (a) CompanyChoose Numerator: Profit Margin Ratio 1 Choose Denominator: Profit margin ratio Profit margin ratio 1 Barco 1 0 % Kyan / = 0 % Common stock, $5 par value Retained earnings Total liabilities and equity 190,000 246,000 136,000 98, 250 $471,140 $546,550 Total assets Common stock, $5 par value Retained earnings 398,000 190,000 126,188 412,500 246,000 84,291 11 Part 2 of 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (C) return on total assets, and (d) return on common stockholders' equity. Assuming that share and each company's stock can be purchased at $80 per share, compute their (e) price- earnings ratios and (1) dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 2b. Identify which company's stock you would recommend as the better investment 12 points Complete this question by entering your answers in the tabs below. Skipped 2A Pro Marg Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock Equity 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the total asset turnover (b) Company Choose Numerator: Total Asset Turnover 1 Choose Denominator: Total Asset Turnover / Total asset turnover Barco / 0 times Kyan 1 0 times Common stock, $5 par value Retained earnings Total liabilities and equity 190,000 246,000 136,000 98, 250 $471, 140 $546,550 Total assets Common stock, $5 par value Retained earnings 398,000 190,000 126,188 412,500 246,000 84,291 11 Part 2 of 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (C) return on total assets, and (d) return on common stockholders' equity. Assuming that share and each company's stock can be purchased at $80 per share, compute their (e) price- earnings ratios and (1dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 2b. Identify which company's stock you would recommend as the better investment. 12 points Complete this question by entering your answers in the tabs below. Skipped 2A Pro Marg Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock Equity 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the return on common stockholders' equity. (d) Company Choose Numerator: Return On Common Stockholders' Equity Choose Denominator Return On Common Stockholders' Equity Return On common stockholders' equity / - Barco / 0 % - Kyan 0 % Common stock, $5 par value Retained earnings Total liabilities and equity 190,000 246,000 136,000 98, 250 $471, 140 $546,550 Total assets Common stock, $5 par value Retained earnings 398,000 190,000 126,188 412,500 246,000 84,291 11 Part 2 of 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (C) return on total assets, and (d) return on common stockholders' equity. Assuming that share and each company's stock can be purchased at $80 per share, compute their (e) price- earnings ratios and (1dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 2b. Identify which company's stock you would recommend as the better investment. 12 points Complete this question by entering your answers in the tabs below. Skipped 2A Pro Marg Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock Equity 2A Price Earn Ratio 2A Div Yield Req 2B Assuming that share and each company's stock can be purchased at $80 per share, compute their price-earnings ratios. Price-Earnings Ratio | Choose Denominator: Company Choose Numerator: = Price-Earnings Ratio = Price-earnings ratio / Barco / 0 times Kyan / 0 times Common stock, $5 par value Retained earnings Total liabilities and equity 190,000 246,000 136,000 98,250 $471, 140 $546,550 Total assets Common stock, $5 par value Retained earnings 398,000 190,000 126,188 412,500 246,000 84,291 11 Part 2 of 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (C) return on total assets, and (d) return on common stockholders' equity. Assuming that share and each company's stock can be purchased at $80 per share, compute their (e) price- earnings ratios and ( dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 2b. Identify which company's stock you would recommend as the better investment. 12 points Complete this question by entering your answers in the tabs below. Skipped 2A Ret On 2A Pro Marg 2A Tot Asset 2A Ret on Tot 2A Price Earn Com Stock Turn Ratio Assets 2A Div Yield Ratio Req 2B Equity Assuming that share and each company's stock can be purchased at $80 per share, compute their dividend yields. (f) Company Dividend Yield 1 Choose Denominator: Choose Numerator: Dividend Yield 1 Dividend yield Barco 0 % Kyan 1 = 0 % Pw Common stock, $5 par value Retained earnings Total liabilities and equity 190,000 246,000 136,000 $471,140 $546,550 98,250 Total assets Common stock, $5 par value Retained earnings 398,000 190,000 126,188 412,500 246,000 84,291 11 Part 2 of 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (C) return on total assets, and (d) return on common stockholders' equity. Assuming that share and each company's stock can be purchased at $80 per share, compute their (e) price- earnings ratios and (1) dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 2b. Identify which company's stock you would recommend as the better investment. 12 points Complete this question by entering your answers in the tabs below. Skipped 2A Pro Marg Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock Equity 2A Price Earn Ratio 2A Div Yield Req 2B Identify which company's stock you would recommend as the better investment. The better investment