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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 Kyan Barco Kyan Company Company Company Company Data from the current year-end balance sheets Data from the current year's income statement Assets $770,000 $889, 200 Cash $ 19,500 $ 34,000 cost of goods sold 585, 180 632,500 Accounts receivable, net 37,400 57,400 Interest expense 7,900 13,000 Current notes receivable (trade) 9, 100 7,200 Income tax expense 14,800 24,300 Merchandise inventory 84,440 132,500 Net income 162,200 210,400 Prepaid expenses 5,600 6,950 Basic earnings per share 4.51 5.11 Plant assets, net 290,000 304,400 Cash dividends per share 3.81 3.93 Total assets $445,440 $542,450 Beginning-of-year balance sheet data Liabilities and Equity Accounts receivable, net $ 29,800 $ 54,200 Current liabilities $ 61,340 $ 93,300 Current notes receivable (trade) 0 @ Long-tern notes payable 80,800 101,000 Merchandise inventory 55,600 107,600 Common stock, $5 par value 180,000 206,800 Total assets 398,000 382,500 Retained earnings 123,300 142, 150 Common stock, $5 par value 180,000 206,000 Total liabilities and equity $445,440 $542,450 Retained earnings 98,300 93,600 Problem 17-5A Part 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 $75 per share, compute their (o) price- earnings ratios and (in 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. 2A Prof Mar Ratio 2A Tot Asset 2A Ret on Tot Turn Assets 2A Ret On Com Stock 2A Price Eam Ratio 2A Div Yield Reg 28 For both companies compute the profit margin ratio. Profit Margin Ratio Company Choose Numerator: Choose Denominator Profit margin ratio Profit margin ratio Barco Kyan A Pro to 2A Tot Asset Turn 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On 2A Price Earn 2A Div Yield Ratio Turn Assets Com Stock Ratio Req 2B For both companies compute the total asset turnover (b) Total Asset Turnover Company Choose Numerator: Choose Denominator: = Total Asset Turnover Total asset turnover Barco times Kyan 1 times 2A Prof Mar Ratio 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On 2A Price Earn Ratio Turn Assets Ratio Com Stock Reg 2B 2A Div Yield For both companies compute the return on total assets. (c) Return on Total Assets Company Choose Numerator: Choose Denominator: Return on Total Assets Return on total assets Barco Kyan % 2A Prof Mar Ratio 2A Tot Asset 2A Ret on Tot Turn Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Reg 2B For both companies compute the return on common stockholders' equity. (d) Return On Common Stockholders' Equity Company Choose Numerator: Choose Denominator - Return On Common Stockholders' Equity Return on common stockholders' equity Barco Kyan 1 . 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On 2A Price Earn Ratio Turn 2A Div Yield Com Stock Assets Req 2B Ratio Assuming that share and each company's stock can be purchased at $75 per share, compute their price-earnings ratios. (e) Price-Earnings Ratio Company Choose Numerator: Choose Denominator: = Price-Earnings Ratio 1 Price-Earnings Ratio Barco times Kyan times 1 / 2A Prof Mar Ratio 2A Tot Asset 2A Ret on Tot Turn Assets 2A Ret On Com Stock ZA Price Eam A Div Yield Req 2B Ratio Assuming that share and each company's stock can be purchased at $75 per share, compute their dividend yields. In Dividend Yield Company Choose Numerator: Choose Denominator: Dividend Yield Dividend Yield Barco Kyan % % 2A Price Earn 2A Div Yield Req 2B 2A Prof Mar ZA Tot Asset 2A Ret on Tot 2A Ret On Ratio Turn Assets Com Stock Ratio Identify which company's stock you would recommend as the better investment. The better investment

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