[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 Kyan Company Company Data from the current year-end balance sheets Data from the current year's income statement Assets Sales $ 780,000 Prepaid expenses Cash $ 22,500 $ 34,000 Accounts receivable, net 48,488 59,480 Marchandise inventory 84,743 138,520 Plant assets, net 5,780 330,000 7,800 312,480 Basic earnings per share Total assets $ 483,348 $ 544,180 Cash dividends per share Current liabilities Liabilities and Equity Long-term notes payable Common stock, $5 par value Retained earnings $ 64,340 83,800 190,000 145,200 $ 94,300 Accounts receivable, net 103,000 Beginning-of-year balance sheet data Merchandise inventory 206,000 Total assets 140,830 Total liabilities and equity $ 483,349 $ 544,190 Common stock, $5 par value Retained earnings Cost of goods sold Interest expense Income tax expanse Net income 586,100 $ 886,200 650,500 7,900 14,000 14,992 24,465 171,008 197,235 4.50 4.79 3.71 3.98 $ 32,800 $ 50,200 61,600 107,400 418,000 382,500 190,000 206,000 115,172 107,541 Problem 17-5A (Algo) Part 2 28. For both companies compute the (o) 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 $95 per share, compute their (e) price-earnings ratios and (f) dividend yields. 2b. Identify which company's stock you would recommend as the better investment.
[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 Kyan Company Company Data from the current year-end balance sheets Data from the current year's income statement Assets Sales $ 780,000 Prepaid expenses Cash $ 22,500 $ 34,000 Accounts receivable, net 48,488 59,480 Marchandise inventory 84,743 138,520 Plant assets, net 5,780 330,000 7,800 312,480 Basic earnings per share Total assets $ 483,348 $ 544,180 Cash dividends per share Current liabilities Liabilities and Equity Long-term notes payable Common stock, $5 par value Retained earnings $ 64,340 83,800 190,000 145,200 $ 94,300 Accounts receivable, net 103,000 Beginning-of-year balance sheet data Merchandise inventory 206,000 Total assets 140,830 Total liabilities and equity $ 483,349 $ 544,190 Common stock, $5 par value Retained earnings Cost of goods sold Interest expense Income tax expanse Net income 586,100 $ 886,200 650,500 7,900 14,000 14,992 24,465 171,008 197,235 4.50 4.79 3.71 3.98 $ 32,800 $ 50,200 61,600 107,400 418,000 382,500 190,000 206,000 115,172 107,541 Problem 17-5A (Algo) Part 2 28. For both companies compute the (o) 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 $95 per share, compute their (e) price-earnings ratios and (f) dividend yields. 2b. Identify which company's stock you would recommend as the better investment.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 74E
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