Required information Problem 17-5A (Algo) 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 Company Data from the current year-end Kyan Company Barco Company Kyan Company balance sheets Data from the current year's income Assets Sales Cash $ 22,500 $ 30,000 Accounts receivable, net 38,400 59,400 Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities: Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 481,040 $ 62,340 79,800 220,000 118,900 84,840 134,500 5,300 330,000 7,800 312,400 $544,100 $ 102,300 109,000 226,000 106,800 $ 481,040 $544,100 statement Cost of goods sold Interest expense Income tax expense Net income Basic earnings per share Cash dividends per share Beginning-of-year balance sheet data. Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value: Retained earnings $ 790,000 $899,200 588,100 650,500 7,500 18,000 15,185 24,824 179,215 205,876 4.07 4.55 3.75 4.02 $ 29,800 $51,200 61,600 109,400 448,000 372,500 220,000 226,000 104,685 82,628 Problem 17-5A (Algo) 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 equity. Assuming that each company's stock can be purchased at $75 per share, compute their (e) price-earnings ratios and ( dividend yields. 2b. Identify which company's stock you would recommend as the better investment. Complete this question by entering your answers in the tabs below. 2A Prof Mar 2A Tot Asset 2A Ret on Tot 2A Ret On Ratio Turn Assets Equity For both companies compute the profit margin ratio. 2A Price Earn Ratio 2A Div Yield Req 28 (a) Company Barco Kyan Numerator: Profit Margin Ratio Denominator: Profit margin ratio Profit margin ratio 0% 0% <2a prof mar ratio 2a tot asset turn>