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***
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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 |
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 |
||||
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***
![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
Assuming that each company's stock can be purchased at $75 per share, compute their dividend yields.
(f)
Dividend Yield
Company
Numerator:
Denominator:
Dividend Yield
Dividend yield
Barco
Кyan
2A Price Earn Ratio
Req 2B
<>
II](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F98e87c1e-d790-489b-a066-bf9d39e643de%2Ff8009b4e-f3b5-41f2-9a95-1af42d1f2c9f%2Fj7oj0t_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
Assuming that each company's stock can be purchased at $75 per share, compute their dividend yields.
(f)
Dividend Yield
Company
Numerator:
Denominator:
Dividend Yield
Dividend yield
Barco
Кyan
2A Price Earn Ratio
Req 2B
<>
II
![Complete this question by entering your answers in the tabs below.
2A Prof Mar
2A Ret on Tot
2A Ret On
Equity
2A Tot Asset
2A Price Earn
2A Div Yield
Req 2B
Ratio
Turn
Assets
Ratio
Assuming that share and each company's stock can be purchased at $75 per share, compute their price-earnings ratios.
(e)
Price-Earnings Ratio
Company
Numerator:
Denominator:
Price-Earnings Ratio
Price-earnings ratio
Barco
times
%3D
| Кyan
times
2A Ret On Equity
2A Div Yield
<>
II](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F98e87c1e-d790-489b-a066-bf9d39e643de%2Ff8009b4e-f3b5-41f2-9a95-1af42d1f2c9f%2F7ijj3o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
2A Prof Mar
2A Ret on Tot
2A Ret On
Equity
2A Tot Asset
2A Price Earn
2A Div Yield
Req 2B
Ratio
Turn
Assets
Ratio
Assuming that share and each company's stock can be purchased at $75 per share, compute their price-earnings ratios.
(e)
Price-Earnings Ratio
Company
Numerator:
Denominator:
Price-Earnings Ratio
Price-earnings ratio
Barco
times
%3D
| Кyan
times
2A Ret On Equity
2A Div Yield
<>
II
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education