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 $ 780,000 $ 883,200 Cash $ 19,000 $ 37,000 Cost of goods sold 589,100 644,500 Accounts receivable, net 37,400 54,400 Interest expense 8,000 12,000 Merchandise inventory 84,340 136,500 Income tax expense 14,992 24,383 Prepaid expenses 5,800 7,350 Net income 167,908 202,317 Plant assets, net 370,000 310,400 Basic earnings per share 4.66 4.68 Total assets $ 516,540 $ 545,650 Cash dividends per share 3.72 3.99 Liabilities and Equity Beginning-of-year balance sheet data Current liabilities $ 67,340 $ 97,300 Accounts receivable, net $ 28,800 $ 50,200 Long-term notes payable 86,800 111,000 Merchandise inventory 59,600 113,400 Common stock, $5 par value 180,000 216,000 Total assets 438,000 392,500 Retained earnings 182,400 121,350 Common stock, $5 par value 180,000 216,000 Total liabilities and equity $ 516,540 $ 545,650 Retained earnings 148,412 91,401 Required: 2a. Price Earn Ratio 2a. Div Yield Req 2B **Please answer the following question: Identify which company’s stock you would recommend as the better investment. Answer- The better Investment: (Barco Company/Kyan Company) Please choose one company for the answer to Req 2B***
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 $ 780,000 $ 883,200 Cash $ 19,000 $ 37,000 Cost of goods sold 589,100 644,500 Accounts receivable, net 37,400 54,400 Interest expense 8,000 12,000 Merchandise inventory 84,340 136,500 Income tax expense 14,992 24,383 Prepaid expenses 5,800 7,350 Net income 167,908 202,317 Plant assets, net 370,000 310,400 Basic earnings per share 4.66 4.68 Total assets $ 516,540 $ 545,650 Cash dividends per share 3.72 3.99 Liabilities and Equity Beginning-of-year balance sheet data Current liabilities $ 67,340 $ 97,300 Accounts receivable, net $ 28,800 $ 50,200 Long-term notes payable 86,800 111,000 Merchandise inventory 59,600 113,400 Common stock, $5 par value 180,000 216,000 Total assets 438,000 392,500 Retained earnings 182,400 121,350 Common stock, $5 par value 180,000 216,000 Total liabilities and equity $ 516,540 $ 545,650 Retained earnings 148,412 91,401 Required: 2a. Price Earn Ratio 2a. Div Yield Req 2B **Please answer the following question: Identify which company’s stock you would recommend as the better investment. Answer- The better Investment: (Barco Company/Kyan Company) Please choose one company for the answer to Req 2B***
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 54E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...
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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 | $ 780,000 | $ 883,200 | ||
Cash | $ 19,000 | $ 37,000 | Cost of goods sold | 589,100 | 644,500 |
37,400 | 54,400 | Interest expense | 8,000 | 12,000 | |
Merchandise inventory | 84,340 | 136,500 | Income tax expense | 14,992 | 24,383 |
Prepaid expenses | 5,800 | 7,350 | Net income | 167,908 | 202,317 |
Plant assets, net | 370,000 | 310,400 | Basic earnings per share | 4.66 | 4.68 |
Total assets | $ 516,540 | $ 545,650 | Cash dividends per share | 3.72 | 3.99 |
Liabilities and Equity | Beginning-of-year balance sheet data | ||||
Current liabilities | $ 67,340 | $ 97,300 | Accounts receivable, net | $ 28,800 | $ 50,200 |
Long-term notes payable | 86,800 | 111,000 | Merchandise inventory | 59,600 | 113,400 |
Common stock, $5 par value | 180,000 | 216,000 | Total assets | 438,000 | 392,500 |
182,400 | 121,350 | Common stock, $5 par value | 180,000 | 216,000 | |
Total liabilities and equity | $ 516,540 | $ 545,650 | Retained earnings | 148,412 | 91,401 |
Required:
2a. Price Earn Ratio
2a. Div Yield
Req 2B **Please answer the following question: Identify which company’s stock you would recommend as the better investment. Answer- The better Investment: (Barco Company/Kyan Company) Please choose one company for the answer to Req 2B***
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