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. Prof Mar Ratio 2a. Tot Asset Turn

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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Question

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. Prof Mar Ratio

2a. Tot Asset Turn

Complete this question by entering your answers in the tabs below.
2A Ret on Tot
2A Ret On
Equity
2A Prof Mar
2A Tot Asset
2A Price Earn
2A Div Yield
Req 2B
Ratio
Turn
Assets
Ratio
For both companies compute the profit margin ratio.
(a)
Profit Margin Ratio
Company
Numerator:
Denominator:
Profit margin ratio
Profit margin ratio
%3D
Barco
%3D
Kyan
%
K 2A Prof Mar Ratio
2A Tot Asset Turn

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
Equity
Ratio
For both companies compute the total asset turnover
(b)
Total Asset Turnover
Company
Numerator:
Denominator:
Total Asset Turnover
Total asset turnover
Barco
times
| Кyan
times
2A Prof Mar Ratio
2A Ret on Tot Assets
<>

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