Please do not provide answer in image formate thnak you.1. Compute the net profit margin, total asset turnover, return on total assets, and return on common stockholders’ equity for both companies.2. Assume each company paid a cash dividend of $1.50 per share and that each company’s stock can be purchased at $25 a share. Compute each company’s price earnings ratio and dividend yield.3. Identify which company’s stock you would recommend as the better investment and explain why. Datatech SigmaCompany CompanyData from the current year-end balance sheet:Assets.CashAccounts receivable, netNotes receivable (trade)Merchandise inventoryPrepaid expensesPlant and equipment, netTotal assets.$ 18,500 $33,00036,4008,10056,4006,20083,440 131,5004,0005,950284,000 303,400$434,440 $536,450Datatech SigmaCompany CompanyData from the current year's income statement:SalesCost of goods soldInterest expenseIncome tax expenseNet incomeBasic earnings per share..$660,000 $780,200485,1006,90012,80067,7701.94532,50011,00019,300105,0002.56 Liabilities and Stockholders'Current liabilities..Long-term notes payable.Common stock, $5 par valueRetained earnings.Total liabilities and equityDatatech SigmaCompany CompanyEquity$ 60,340 $92,30079,800 100,000175,000 205,000119,300 139,150$434,440 $536,450Beginning-of-year data:Accounts receivable, netNotes receivable (trade).Merchandise inventory.Total assetsCommon stock, $5 par valueRetained earnings.......Datatech SigmaCompany Company.$ 28,800 $ 53,2000054,600106,400388,000372,500175,000 205,00094,30090,600

Financial ratios are defined as measures to project the growth of an entity. Two or more variables…

Data from the current year-end balance sheet: Assets Cash ***E *********** ******* Accounts receivable, net Notes receivable (trade) Merchandise inventory Prepaid expenses Plant and equipment, net ****** Total assets THE ***** ***** Datatech Sigma Company Company ************** $ 18,500 $33,000 36,400 56,400 8,100 6,200 83,440 131,500 4,000 5,950 284,000 303,400 $434,440 $536,450 Data from the current year's income statement: Sales Cost of goods sold Interest expense Income tax expense ******LTE **** ***E Datatech Sigma Company Company Net income ***** Basic earnings per share..... $660,000 $780,200 485,100 532,500 6,900 11,00C 12,800 19,300 67,770 105,000 1.94 2.56

Data from the current year-end balance sheet: Assets Cash *E ***** * Accounts receivable, net Notes receivable (trade) Merchandise inventory Prepaid expenses Plant and equipment, net ** Total assets THE * * Datatech Sigma Company Company ******** $ 18,500 $33,000 36,400 56,400 8,100 6,200 83,440 131,500 4,000 5,950 284,000 303,400 $434,440 $536,450 Data from the current year's income statement: Sales Cost of goods sold Interest expense Income tax expense LTE *E Datatech Sigma Company Company Net income ***** Basic earnings per share..... $660,000 $780,200 485,100 532,500 6,900 11,00C 12,800 19,300 67,770 105,000 1.94 2.56

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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