Problem 17-5A Comparative ratio analysis LO P3 Skip to question [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 Kyan Company Barco Company Kyan Company Data from the current year-end balance sheets Data from the current year’s income statement Assets Sales $ 770,000 $ 882,200 Cash $ 19,000 $ 37,000 Cost of goods sold 593,100 638,500 Accounts receivable, net 36,400 58,400 Interest expense 7,800 18,000 Merchandise inventory 84,440 130,500 Income tax expense 14,800 24,355 Prepaid expenses 5,500 7,150 Net income 154,300 201,345 Plant assets, net 370,000 312,400 Basic earnings per share 4.06 4.09 Total assets $ 515,340 $ 545,450 Cash dividends per share 3.78 3.94 Liabilities and Equity Beginning-of-year balance sheet data Current liabilities $ 67,340 $ 95,300 Accounts receivable, net $ 26,800 $ 56,200 Long-term notes payable 79,800 103,000 Merchandise inventory 61,600 111,400 Common stock, $5 par value 190,000 246,000 Total assets 438,000 392,500 Retained earnings 178,200 101,150 Common stock, $5 par value 190,000 246,000 Total liabilities and equity $ 515,340 $ 545,450 Retained earnings 167,540 93,653 I also need help with Part 2 of the Tabs section

Corporate Financial Accounting

15th Edition

ISBN:9781337398169

Author:Carl Warren, Jeff Jones

Publisher:Carl Warren, Jeff Jones

Chapter14: Financial Statement Analysis

Section: Chapter Questions

Problem 14.2MAD

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Problem 17-5A Comparative ratio analysis LO P3

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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 Company	Kyan Company		Barco Company	Kyan Company
Data from the current year-end balance sheets		Data from the current year’s income statement
Assets						Sales	$	770,000	$	882,200
Cash	$	19,000	$	37,000		Cost of goods sold		593,100		638,500
Accounts receivable, net		36,400		58,400		Interest expense		7,800		18,000
Merchandise inventory		84,440		130,500		Income tax expense		14,800		24,355
Prepaid expenses		5,500		7,150		Net income		154,300		201,345
Plant assets, net		370,000		312,400		Basic earnings per share		4.06		4.09
Total assets	$	515,340	$	545,450		Cash dividends per share		3.78		3.94

Liabilities and Equity						Beginning-of-year balance sheet data
Current liabilities	$	67,340	$	95,300		Accounts receivable, net	$	26,800	$	56,200
Long-term notes payable		79,800		103,000		Merchandise inventory		61,600		111,400
Common stock, $5 par value		190,000		246,000		Total assets		438,000		392,500
Retained earnings		178,200		101,150		Common stock, $5 par value		190,000		246,000
Total liabilities and equity	$	515,340	$	545,450		Retained earnings		167,540		93,653

I also need help with Part 2 of the Tabs section

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 each company's stock can be purchased at $100 per share, compute their (e) price-earnings ratios
and (f 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 Prof Mar
2A Tot Asset
2A Ret on Tot
2A Ret On
2A Price Earn
2A Div Yield
Req 2B
Ratio
Turn
Assets
Com Stock
Ratio
For both companies compute the profit margin ratio.
(a)
Profit Margin Ratio
Company Choose Numerator:
I Choose Denominator:
Profit margin ratio
Profit margin ratio
Barco
0 %
%3D
|Кyan
0 %
< 2A Prof Mar Ratio
2A Tot Asset Turn >

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