Required information Problem 13-5A (Static) 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 Kyan Company Barco Company Kyan Company Data from the current year-end balance sheets Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 19,500 46,500 84,440 5,000 290,000 $ 445,440 $ 34,000 64,600 132,500 6,950 304,400 $ 542,450 $ 770,000 585, 100 7,900 14,800 162,200 4.51 $ 880, 200 632,500 13,000 24,300 210,400 5.11 Data from the current year's income statement Sales 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 3.81 3.93 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 61,340 80,800 180,000 123,300 $ 445,440 $ 93,300 101,000 206,000 142, 150 $ 542,450 $ 29,800 55,600 398,000 180,000 98,300 $ 54,200 107,400 382,500 206,000 93,600 Problem 13-5A (Static) 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 (el price-earninas ratios and if dividend Complete this question by entering your answers in the tabs below. 2A Prof Mar Ratio 2A Tot Asset 2A Ret on Tot Turn Assets 2A Ret On Equity 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the profit margin ratio. (a) Company Profit Margin Ratio Denominator: Numerator: I = 1 II Profit margin ratio Profit margin ratio 0 % Barco / Kyan / 0 % 2A Prof Mar Ratio 2A Tot Asset 2A Ret on Tot Turn Assets 2A Ret On Equity 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the total asset turnover (b) Company Total Asset Turnover Denominator: Numerator: 1 II = 1 11 Total Asset Turnover Total asset turnover 0 times 0 times 1 = Barco Kyan / 11 2A Prof Mar Ratio 2A Tot Asset 2A Ret on Tot Turn Assets 2A Ret On Equity 2A Price Earn Ratio 2A Div Yield Req 2B For both companies compute the return on total assets. (c) Return on Total Assets Denominator: Company Numerator: 1 = Return on Total Assets Return on total assets / / = Barco Kyan 0 % 0 % / II < 2A Tot Asset Turn 2A Ret On Equity > 2A Prof Mar Ratio 2A Tot Asset 2A Ret on Tot Turn Assets 2A Ret On Equity 2A Price Earn Ratio 2A Div Yield Reg 2B For both companies compute the return on equity. (d) Company Return On Equity Denominator Numerator: 1 II Return On Equity Return on equity / = Barco / 0 % Kyan 1 0 % 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Equity 2A Price Earn Ratio 2A Div Yield Reg 2B Assuming that share and each company's stock can be purchased at $75 per share, compute their price-earnings rati (e) Price-Earnings Ratio 1 Denominator: Company Numerator: = / - Price-Earnings Ratio Price-Earnings Ratio 0 times 1 Barco Kyan / 0 times 2A Prof Mar Ratio 2A Tot Asset Turn 2A Ret on Tot Assets 2A Ret On Equity 2A Price Earn Ratio 2A Div Yield Reg 2B Assuming that each company's stock can be purchased at $75 per share, compute their dividend yields. Dividend Yield (f) Company Numerator: 1 Denominator: Dividend Yield Dividend Yield / Barco 1 0 % Kyan / 0 %
