Problem 13-5A Comparative ratio analysis LO P3 [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 Company Company Data from the current year-end balance sheets Assets Cash $ 22,500 $ 31,280 Accounts receivable, net 36,480 53,48 Merchandise inventory 84,940 132,580 Prepaid expenses 5,988 7,488 Plant assets, net 370, eae 3e5,490 Total assets $519,740 $529,700 Barco Kyan Company Company Data from the current year's income statement Sales $780,000 $915,200 Cost of goods sold 592,100 646 see Interest expense 9,eae 14, eee Income tax expense 14,992 25 266 Net income 163,988 229,434 Basic earnings per share 3.90 4.86 Cash dividends per share 3.76 3.94 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity Beginning-of-year balance sheet data $ 69,340 $ 99,389 Accounts receivable, net 88,880 99,809 Merchandise inventory 219,899 236,000 Total assets 159,608_95,488 common stock, $5 par value $519,740 $529,789 Retained earnings $ 26,800 $ 55,200 59,600 113,400 418,880 402 see 210,000 236,000 153,612 51934 Problem 13-5A Part 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, () return on total assets, and (d) return on common stockholders' equity. Assuming that each company's stock can be purchased at $70 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. Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Reg 2B For both companies compute the profit margin ratio. (a) Company Choose Numerator: Profit Margin Ratio 1 Choose Denominator: 1 Profit margin ratio Profit margin ratio 0 % Barco 1 Kyan 1 = 0 % 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Reg 2B For both companies compute the total asset turnover (b) Company Choose Numerator: Total Asset Turnover . Choose Denominator: = Total Asset Turnover Total asset turnover Barco 1 O times Kyan 1 O times 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Reg 2B For both companies compute the return on total assets. (c) Return on Total Assets Company Choose Numerator: 1 Choose Denominator: Return on Total Assets 1 = Return on total assets Barco / = 0 % 0 % Kyan 1 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot 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 1 Choose Denominator Company Choose Numerator: Return On Common Stockholders' Equity Return On common stockholders' equity 1 1 0 % Barco Kyan / 0 % Complete this question by entering your answers in the tabs below. 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Reg 2B Assuming that share and each company's stock can be purchased at $70 per share, compute their price-earnings ratios. le) Company Price-Earnings Ratio Choose Denominator: Choose Numerator: Price-Earnings Ratio = Price-earnings ratio Barco O times Kyan 0 times Complete this question by entering your answers in the tabs below. Ratio 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On 2A Price Earn 2A Div Yield Reg 2B Turn Assets Com Stock Ratio Assuming that each company's stock can be purchased at $70 per share, compute their dividend yields. Dividend Yield (7) Company Choose Numerator: 1 Choose Denominator: Dividend Yield Dividend yield 0 % Barco Kyan 0 % Complete this question by entering your answers in the tabs below. 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Reg 2B Identify which company's stock you would recommend as the better investment. The better investment