Required information [The following information applies to the questions displayed below.] Summary information from the financial...
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Required information [The following information applies to the questions displayed below.] Summary information from the financial statements of two companies competing in the same industry follows. Merchandise inventory Barco Company Kyani Company Barco Company Kyan Company Data from the current year-end Data from the current year's balance sheets income statement Assets Sales $770,000 $ 907,200 Cash $ 18,000 $ 30,000 Cost of goods sold 592,100 648,500. Accounts receivable, net 39,400 85,040 50,400 132,500 Interest expense 8,300 19,000 Income tax expense 14,800 25,045 7,450 Net income 308,400 5,400 350,000 $497,840 $ 528,750 Cash dividends per share Beginning-of-year balance sheet Accounts receivable, net Merchandise inventory $ 28,800 154,800 214,655 Basic earnings per share. 4.30 5.48 3.82 3.99 Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value. Retained earnings data $ 65,340 $104,300 83,800 109,000 196,000 119,450 Total assets Common stock, $5 par value Retained earnings 180,000 168,700 Total liabilities and equity $497,840 $528,750 $ 53,200 59,600 107,400 378,000 382,500 180,000 196,000 151,420 61,203 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 $100 per share, compute their (e) price-earnings ratios and (dividend yields. 2b. Identify which company's stock you would recommend as the better investment. For both companies compute the profit margin ratio. ces Company Barco Kyan Numerator: / / Profit Margin Ratio Denominator: = Profit margin ratio = Profit margin ratio = % = % For both companies compute the total asset turnover (b) Company Numerator: Barco Kyan Total Asset Turnover Denominator: " Total Asset Turnover Total asset turnover times times (c) Return on Total Assets Company Numerator: Denominator: Barco Kyan Return on Total Assets = Return on total assets. = % % For both companies compute the return on equity. (5) Company Numerator: Return On Equity Denominator Barco Kyan = Return On Equity Return On equity % % ** Assuming that share and each company's stock can be purchased at $100 per share, compute their price-earnings ratios. (e) Company Barco Kyan Numerator: Price-Earnings Ratio Denominator: Price-Earnings Ratio Price-earnings ratio times times Assuming that each company's stock can be purchased at $100 per share, compute their dividend yields. (1) Company Barco Kyan Numerator: Dividend Yield Denominator: <2A Price Earn Ratio. Dividend Yield Dividend yield = % = Identify which company's stock you would recommend as the better investment. The better investment s Required information [The following information applies to the questions displayed below.] Summary information from the financial statements of two companies competing in the same industry follows. Merchandise inventory Barco Company Kyani Company Barco Company Kyan Company Data from the current year-end Data from the current year's balance sheets income statement Assets Sales $770,000 $ 907,200 Cash $ 18,000 $ 30,000 Cost of goods sold 592,100 648,500. Accounts receivable, net 39,400 85,040 50,400 132,500 Interest expense 8,300 19,000 Income tax expense 14,800 25,045 7,450 Net income 308,400 5,400 350,000 $497,840 $ 528,750 Cash dividends per share Beginning-of-year balance sheet Accounts receivable, net Merchandise inventory $ 28,800 154,800 214,655 Basic earnings per share. 4.30 5.48 3.82 3.99 Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value. Retained earnings data $ 65,340 $104,300 83,800 109,000 196,000 119,450 Total assets Common stock, $5 par value Retained earnings 180,000 168,700 Total liabilities and equity $497,840 $528,750 $ 53,200 59,600 107,400 378,000 382,500 180,000 196,000 151,420 61,203 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 $100 per share, compute their (e) price-earnings ratios and (dividend yields. 2b. Identify which company's stock you would recommend as the better investment. For both companies compute the profit margin ratio. ces Company Barco Kyan Numerator: / / Profit Margin Ratio Denominator: = Profit margin ratio = Profit margin ratio = % = % For both companies compute the total asset turnover (b) Company Numerator: Barco Kyan Total Asset Turnover Denominator: " Total Asset Turnover Total asset turnover times times (c) Return on Total Assets Company Numerator: Denominator: Barco Kyan Return on Total Assets = Return on total assets. = % % For both companies compute the return on equity. (5) Company Numerator: Return On Equity Denominator Barco Kyan = Return On Equity Return On equity % % ** Assuming that share and each company's stock can be purchased at $100 per share, compute their price-earnings ratios. (e) Company Barco Kyan Numerator: Price-Earnings Ratio Denominator: Price-Earnings Ratio Price-earnings ratio times times Assuming that each company's stock can be purchased at $100 per share, compute their dividend yields. (1) Company Barco Kyan Numerator: Dividend Yield Denominator: <2A Price Earn Ratio. Dividend Yield Dividend yield = % = Identify which company's stock you would recommend as the better investment. The better investment s
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