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Required information Problem 13-5A Comparative ratio analysis LO A1, 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 Barco Kyan Company Data from the current year-end balance sheets Company Company Data from the current year's income statement Sales $780,000 $905,200 644,500 17,000 24,990 218,710 4.84 4.00 Assets $ 19,500 $ 37,000 39,400 9,800 84,640 5,300 310,000 Cost of goods sold Interest expense Income tax expense Net income 585,100 8,100 14,992 171,808 5.05 Cash Accounts receivable, net Current notes receivable (trade) Merchandise inventory Prepaid expenses 55,400 8,000 132,500 7,650 304,400 Basic earnings per share Cash dividends per share Plant assets, net 3.73 Total assets $468,640 $544,950 Beginning-of-year balance sheet data Accounts receivable, net Current notes receivable (trade) Merchandise inventory Liabilities and Equity $ 28,800 $ 56,200 Current liabilities $ 69,340 $ 95,300 61,600 418,000 113,400 372,500 226,b00 82,800 103,000 Long-term notes payable Common stock, $5 par value Retained earnings 226,000 120,650 $468,640 $544,950 170,000 Total assets 146,500 Common stock, $5 par value 170,000 Total liabilities and equity Retained earnings 101,512 82,740 Problem 13-5 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 share and each company's stock can be purchased at $100 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. 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total as stockholders' equity. Assuming that share and each company's stock can be purchased at $100 per sh earnings ratios and (1 dividend yields. (Do not round intermediate calculations. Round your answers 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 Ret On 2A Pro Marg 2A Ret on Tot 2A Tot Asset 2A Price Earn 2A Div Yield Com Stock Req 2B Turn Ratio Assets Ratio Equity For both companies compute the profit margin ratio. Profit Margin Ratio (a) Profit margin ratio Company Choose Numerator: Net income Choose Denominator: %3D Profit margin ratio I [Net sales %3D Barco Kyan 2A Tot Asset Turn stockholders equity. Assuming that share and each company's stock can be purchased at $100 per sh. earnings ratios and (1 dividend yields. (Do not round intermediate calculations. Round your answers 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 Pro Marg Ratio 2A Tot Asset Turn 2A Ret o Tot Assets 2A Ret On Com Stock 2A Price Earn Ratio 2A Div Yield Req 2B Equity For both companies compute the total asset turnover (b) Total Asset Turnover Company Choose Numerator: | Choose Denominator: Total Asset Turnover = Total asset turnover Barco 0 times Kyan 0 times 2A Pro Marg Ratio 2A Ret on Tot Assets %3D PPoblem 15-5 PaiL 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on tot stockholders' equity. Assuming that share and each company's stock can be purchased at $100 pe earnings ratios and ( dividend yields. (Do not round intermediate calculations. Round your answ 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 Pro Marg Ratio 2A Ret on fot Assets 2A Ret On Com Stock 2A Tot Asset 2A Price Earn 2A Div Yield Req 2B Turn Ratio Equity For both companies compute the return on total assets. (c) Return on Total Assets Company Choose Numerator: Choose Denominator: Return on Total Assets Net income Average total assets = Return on total assets Barco %3! Kyan 2A Tot Asset Turn 2A Ret On Com Stock Equity > Long-term notes payable Common stock, $5 par value Retained earnings 103,000 226,000 120,650 $468,640 $544,950 82,800 170,000 146,500 Merchandise inventory Total assets 61,600 418,000 3' Common stock, $5 par value Retained earnings 170,000 22 Total liabilities and equity 101,512 Problem 13-5 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 comme stockholders' equity. Assuming that share and each company's stock can be purchased at $100 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. 2A Pro Marg Ratio 2A Tot Asset Turn 2A Ret on Tot Assets RA Ret On tom Stock Equity 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the return on common stockholders' equity. Return On Common Stockholders' Equity Company Choose Numerator: Choose Denominator - Return On Common Stockholders' Equity = Return On common stockholders' equity Barco %3D Kyan %3D 2A Ret on Tot Assets 2A Price Earn Ratio Problem 13-5 Part 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total as stockholders' equity. Assuming that share and each company's stock can be purchased at $100 per sha earnings ratios and ( dividend yields. (Do not round intermediate calculations. Round your answers 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 Ret On 2A Pro Marg Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Price Earn Com Stock 2A Div Yield Req 2B Equity Ratio Assuming that share and each company's stock can be purchased at $100 per share, compute their price- (e) Price-Earnings Ratio Company Choose Numerator: IChoose Denominator: = Price-Earnings Ratio Market price per common share I Earnings per share = Price-earnings ratio Barco 0 times %3D Kyan 0 times %3D 2A Ret On Com Stock Equity 2A Div Yield Problem 13-5 Part 2 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total stockholders' equity. Assuming that share and each company's stock can be purchased at $100 per earnings ratios and (f dividend yields. (Do not round intermediate calculations. Round your answe- 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 Ret On Com Stock Equity 2A Price Earn Ratio 2A Ret on Tot Assets 2A Pro Marg 2A Tot Asset Turn 2A Div Yield Req 2B Ratio Assuming that share and each company's stock can be purchased at $100 per share, compute their di Dividend Yield (1) Choose Denominator: Dividend Yield Company Choose Numerator: = Dividend yield Market price per share Annual cash dividends per share Barco %3D Kyan %3D

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