For both companies compute the ( a ) profit margin ratio, ( b ) total asset turn
ID: 2491970 • Letter: F
Question
For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on common stockholders’ equity. Assuming that share and each company’s stock can be purchased at $100 per share, compute their (e) price-earnings ratios and (f) dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on common stockholders’ equity. Assuming that share and each company’s stock can be purchased at $100 per share, compute their (e) price-earnings ratios and (f) dividend yields. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Explanation / Answer
DAYS SALES IN INVENTORY
ENDING INVENTORY / COST OF GOODS SOLD) * 365
BARCO-
= ($84740 / $592100) * 365
= 0.143 *365
= 52.20
KYAN-
= ($140500 / $650500) * 365
= 0.216 * 365
= 78.84
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DAYS SALES UNCOLLECTED
(ACCOUNTS RECEIVABLE / NET SALES) *365
BARCO-
= ($35400 / $810000) * 365
= 0.044 * 365
= 16.06
KYAN-
= ($58400 / $894200) * 365
= 0.065 * 365
= 23.73
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PROFIT MARGIN RATIO
NET INCOME / NET SALES
BARCO-
= ($193231 / $810000)
= 0.2386 OR 23.86%
KYAN
= ($206014 / $894200)
= 0.2304 OR 23.04%
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TOTAL ASSET TURNOVER RATIO
NET SALES / AVERAGE TOTAL ASSET
BARCO-
= $810000 / [($418000 + $443840) / 2]
= $810000 / $430920
= 1.88
AYAN-
= $894200 / [($392500 + $563200) / 2]
= $894200 / $477850
= 1.87
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RETURN ON TOTAL ASSET
NET INCOME / AVERAGE TOTAL ASSET
BARCO-
=$193231 / [($418000 + $443840) / 2]
= $193231 / $430920
= 0.4484 OR 44.84%
AYAN-
= $206014 / [($392500 + $563200) / 2]
= $206014 / $477850
= 0.4311 OR 43.11%
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RETURN ON COMMON SHAREHOLDERS EQUITY
NET INCOME / AVERAGE SHAREHOLDERS EQUITY
BARCO
= $193231 / [{($170000 + $53009) + ($170000 + $116700)} / 2]
= $193231 / [($223009 + $286700) / 2 ]
= $193231 / $254854.5
= 0.7582 OR 75.82%
AYAN-
= $206014 / [{($216000 + $112526) + ($216000 + $147900)} / 2]
= $206014 / [($328526 + $363900) / 2]
= $206014 / $346213
= 0.5950 OR 59.50%
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PRICE EARNNING RATIO
MARKET PRICE / EPS
BARCO-
= $100 / $5.68
= 17.61
AYAN-
= $100 / $4.77
= 20.96
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DIVIDEND YEILD
CASH DIVIDEND PER SHARE / MARKET VALUE PER SHARE
BARCO-
= $3.81 / $100
= 0.0381 OR 3.81%
AYAN
= $3.95 / $100
= 0.0395 OR 3.95%
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